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Sole Proprietorship Registration

Sole Proprietorship Registration

Obtaining ESIC registration is a compulsory responsibility of the employers of an establishment. ESI Registration is provided by an autonomous body named ESIC, which is governed by the provisions of the ESI Act 1948. ESI is a self-financing social security and health insurance scheme for Indian workers.

Package Included :

  • Business Activity discussion
  • Proprietorship name finalization
  • GST & MSME Registration Certificate
  • Annual Tax Returns
  • Accounting and Business Planning

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Overview on Sole Proprietorship Registration?

In India, majority of the businesses are unregistered, which are operated as sole proprietorship firms. A sole proprietorship is the simplest and easiest form of business entity to register and maintain in India. There is no formal regulation for sole proprietorship registration. However, to start certain proprietorship firms, there is a requirement of obtaining business licenses, capital and PAN number of the Proprietor.

Sole proprietorship in India is an extension of the proprietor business and needs no formal procedure for registration. However, now sole proprietorship registration in India can be done only by opening a bank account in the name of the proprietorship firm or obtaining licenses required for conducting the business.

The owner signs the contracts in his or her own name because the sole proprietorship business has no separate identity under the eyes of the law. The owner of the proprietorship has customers who write cheques in the name of the owner. Sole proprietor owners use both their personal and business property/funds, which is not done in the case of partnership firm and company. These firms have bank accounts in the owner’s name. Sole proprietors need no formalities such as voting and conduction of meetings associated with the business. The sole proprietorship can file the lawsuits (and can be sued) in the name of the owner.

Documents for Sole Proprietorship Registration

For registering in sole Proprietorship, the following documents are required:

  • Aadhar Card
  • PAN card
  • Bank Account
  • Registered Address Proof

These firms do not require specific registration. But in order to run the business smoothly, they have an option to get registered under the following:

  • GST registration
  • Registered as MSME
  • Register under Shop and Establishment Act

Other Documents required for the sole proprietorship entity are as follows:

  • License/ Certificate issued by Municipal Authorities
  • CST/VAT certificate
  • Income tax returns documents
  • Certificate issued by Service Tax/ Sales Tax /Professional Tax authorities
  • Certificate issued by Food and Drug Control Authorities, Indian Medical Council
  • IEC (Importer Exporter Code) issued to the proprietor owner by the office of DGFT
  • Utility bills such as water bill, electricity bill and landline telephone bills in the name of the proprietor owner

Sole Proprietorship Registration Process

Comparison among Sole Proprietorship Firm /OPC / Partnership

COMPARISON

PROPRIETORSHIP

OPC

PARTNERSHIP

Applicability

There is no specific Act for the governance of sole proprietorship.

The OPC is incorporated under the Companies Act 2013.

The Partnership firm is registerted under the Partnership Act 1932.

Minimum Capital

There is no specific minimum paid-up capital is required.

Earlier minimum paid-up capital was Rs 1Lakh After the amendment in 2015 there is no minimum capital required.

There is no minimum paid up capital.

Number of members

A single person can start the business of sole proprietorship.

In OPC, only one member is required. It is necessary to appoint a nominee.

The minimum two members required which can be extended to 50 members.

Inheritance of Entity

No separate legal entity nor having perpetual succession.

The OPC also has the separate legal entity but requires the nominee at the time of incorporation.

The partnership firm has no perpetual succession.

Liability

There is a personal liability of the owner.

The liability is limited as have a separate identity from the owner.

The owners have personal liability at the time of dissolution of the firm.

Advantages of Sole Proprietorship Registration in India

The following are the advantages of the Sole Proprietorship in India:

  • The Proprietorship firm does not need any compulsory registration.
  • It is easy to start a new business without engaging in any formalities.
  • It has a minimum compliance requirement.
  • It does not require any audited statements with MCA each year
  • The proprietorship with the income of less than 2 lakhs does not require to pay the income tax.
  • A single person can start a business of proprietorship.
  • There is a low capital requirement as it depends upon the owner and his will.

Compliances required for Sole Proprietorship Registration

The following compliances for the proprietorship firm registration

  • TDS Return Filing
  • Filing Income Tax Return
  • GST Compliances
  • Drafting of Financial Statements
  • Tax Audit Compliance
  • Documentation of invoices of sales and purchases

Why choose Enterslice?

  • Enterslice helps in providing various services regarding the registration process.
  • While helping in sole proprietorship registration, we fill the form on behalf of our client and help in submitting the documents.
  • We keep track of the whole process and continue to guide for helping our clients
  • We maintain high touch communication with our clients and promptly reply to them.
  • For us, security is paramount
  • We are committed to quality work
  • We help our clients with support to solve business problems and to ensure continuous networking of your business.
  • We provide instant response to requests in guaranteed time duration.
  • We have a wide spectrum of skilled and experienced experts and provide affordable hosting solutions, friendly knowledge support and ensure you a successful online presence.
  • We at Enterslice also help our clients after post incorporation compliance services.

Frequently Asked Questions

What are the Fees involved for Sole proprietorship firm registration in India?
No such statutory fees as such are required, only cost for respective other certificates involved say GST registration, MSME registration etc is required.
Is minor are allowed to start a sole proprietorship?
No, a minor cannot allow starting a sole proprietorship. Only a major whose age is above 18 can start a sole proprietorship firm.
Is a sole proprietorship allowed to have employees?
Yes, a sole proprietor is allowed to hire and have employees.
Can I pay myself a salary, being the sole proprietorship?
Treatment in tax is like a sole proprietor is not entitled to tax deductions on salary paid to himself reason being logical that such payments are not business expenses. In case you do so you are merely is transferring funds from a business account to your own personal account only.
What is the tax to be paid by the sole proprietors?
The business does not come under tax purview as such separately however, you must report all business income or losses on your personal income tax return.
What happens to the property when a sole proprietor dies?
As a sole proprietor, your business ceases to exist when you die. Your business's assets and liabilities become part of your estate.
Is the ownership of a sole proprietorship transferable?
The sole proprietor can transfer the business by selling its tangible and intangible assets; as there is no concept of a separate legal entity, the owner and business are one and the same.
What is a sole proprietorship?
A sole proprietorship is a type of enterprise that is owned and run by one person who is the sole trader or proprietor. In this, there is no legal distinction between the business entity and the owner.
How to register a sole proprietorship in India?
There is no particular government registration needed in order to start a sole proprietorship business in India. But still one can register his sole proprietorship business under MSME or Shop and Establishment Act.
How to open a current account for a sole proprietorship in India?
The Sole proprietor can open current bank account by submitting documents such as License/ Certificate issued by Municipal Authorities, CST/VAT certificate, and Income tax returns documents, Certificate issued by Service Tax/ Sales Tax /Professional Tax authorities, Certificate issued by Food and Drug Control Authorities, Indian Medical Council as an identity and address proof
How to file an income tax return for a sole proprietorship in India?
When a sole proprietor is earning an income from business and professional income then he may go ahead filing ITR 3 or file ITR 4 for the presumptive scheme of tax.
How to file an iHow can one apply for pan card for a sole proprietorship?ncome tax return for a sole proprietorship in India?
The sole proprietor can apply for pan card for the sole proprietorship business in his own name. By filling Form 49, A one can apply for pan card in the name of the proprietor.
How can one apply for pan card for a sole proprietorship?
The sole proprietor can apply for pan card for the sole proprietorship business in his own name. By filling Form 49, A one can apply for pan card in the name of the proprietor.
How to close the sole proprietorship business in India?

There is no proper procedure for the winding up or closing of the sole proprietorship business in India. Only once the closing is done by the proprietor he has to inform the employees working in the sole proprietorship firm.

How to change the name of sole proprietorship in India?
The amendment or change in the name of the sole proprietorship is made by structuring sale agreement, cancelling or changing DBA, notifying interested parties, by giving the public and government notice.
How to verify sole proprietorship in India?
The registration for the sole proprietorship is not necessary in India. But to maintain and verify the business of sole proprietorship, one needs to open a current bank account which will prove the existence of the firm.
Is conversion sole proprietorship into a private limited company?
One can change sole proprietorship into a company by registering it to ROC within 30 days after making an application. The conversion makes sole proprietorship assets to be transferred to the newly formed company and also liable to pay tax for any capital gains.
What happens when the owner dies of a sole proprietorship?
The sole proprietorship business has no separate legal entity and not have perpetual succession. Hence if the owner dies, the business would cease to exist. The PAN of the proprietor and the firm are same so if the owner dies the registration of GST becomes void.
Sole proprietorship or partnership which is better?

The business of the sole proprietorship requires limited capital investment, less compliances and a single person who is the proprietor can start the business whereas in the partnership firm the registration is required with a more capital and it is necessary requires minimum two persons to start a partnership firm.

 

 

What is the advantage of a sole proprietorship?

The advantages of sole proprietorship business are limited capital investment, less compliances and one person who is the proprietor can start the business. There is no compulsory registration required for proprietorship business.

 

 

How to make a balance sheet for a sole proprietorship?

The assets of the business are mentioned on the left side of the balance sheet , while liabilities and owners equity appears on the right side of the balance sheet.

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