Sole Proprietorship Registration

Sole Proprietorship Firm Registration is Single Person Firm Registration. Registering a Proprietorship firm in India requires no formalities or registration. There is nothing as proprietorship registration on paper. Documents Required for Proprietorship Registration in India. Easily register a sole proprietorship online with Taxchakara.

When a business is managed and owned by one single person, it is called a sole proprietorship company. This type of business structure can be incorporated in fifteen days and therefore makes it one of the most preferred types of business structures to start in the unsystematic sector, especially among small traders and merchants. Generally, registration is not required for a Proprietorship firm business, as it is distinguished through alternate government business-related registrations, such as GST registrations. Additionally, its liability has no limit; hence it doesn’t hold perpetual existence.

In a sole proprietorship business structure, there is no legal difference between the business and the owner. To make it clear, a sole proprietorship is not a legal entity. The owner of the business is completely responsible for clearing off all the debts and loans of the business. The sole proprietorship is one of the preferable and popular forms of business in India. It is simple and easy to start that too at a nominal cost.

A single proprietorship is a simplified and most convenient way to start a business in India. It is neither considered as a company nor a corporation and the business is owned and controlled by an individual who is the owner, director, member and shareholder of the proposed entity. Some of the common examples of proprietorship business are shops like grocery, chemist, saloons, and so on.

A sole proprietorship is a simplified and most convenient way to start a business in India. It is neither considered as a company nor a corporation and the business is owned and controlled by an individual who is the owner, director, member and shareholder of the proposed entity. Some of the common examples of proprietorship business are shops like grocery, chemist, saloons, and so on.

An individual who wants to start his own business can form and run their business as a sole proprietor and can enjoy the complete rights and responsibility of his business. As per the Income Tax Act, the loss or profit of the Sole Proprietorship is considered as the loss or profit of the owner and the income that gained from the Sole Proprietorship is considered as the income of the owner of the business. Most of the entrepreneurs believe that individual Sole Proprietor as an ideal business entity and have incorporated their business under it.

 

Registering a sole proprietorship business is a completely online process that can be done with the help of an expert like us. However, a person who is interested in registering as a sole proprietorship needs to fulfil some basic requirements such as opening a bank account in the name of the entity, and so on.

Advantages of a Sole Proprietorship Firm Registration in India

Each and every business structure has its own advantages. Likewise, some of the advantages of a Sole Proprietorship Business mention below:

 

  • Individual’s Investment:

To form a sole trader company, an individual who wishes to start this type of entity has to invest his personal assets or should get money from other financial resources such as bank loan, borrowing money or lending loan.

  • No Sharing Of Profit Or Loss:

All the income gained or the loss or debt obtained by the Sole Proprietorship Business belongs to the owner of the entity, and he/she is not allowed to share it with someone else.

  • Ownership:

An individual person holds the complete power of the entire business and that person is the owner of the firm. Later, that individual can transfer the ownership of the business through a will or as his last testament.

  • Fewer Formalities:

With the ease of beginning, a sole proprietorship company firm comes with a few rules, formalities and regulations before and after the registration process.

  • Unlimited Liabilities:

This feature of this business structure sometimes acts as a flaw. Since the business and the owner of the business have no separate identity, even the personal property of the owner can be used to repay all the debts and loans that happened because of this business.

  • Control Power

The control power of the entire business is in the hands of a single person or the owner, and he/she don’t have to answer anyone else. The individual who is the owner of this business should be capable of using his intelligence, expertise, skills and hard-working to run all the business activities.

Why should one choose a Sole Proprietorship firm?

A sole proprietorship firm is one of the best business structures for entrepreneurs who wish to start a business and like to do everything on their own for their business. Here are the important factors to know why one should choose a Sole Proprietorship firm:

  • Allows flexibility in running the business activities The oldest and easiest type of business structures
  • one hand control
  • Easy to commence and close
  • Hazel free business entity with very few needed compliances
  • Only boss of your business means not needed to answer to any member or shareholder or director of the business
  • Self- Accountability
  • One hand power for decision-making 
  • No sharing business mean the income and the profits is all yours
  • No disputes, no discomfort, no conflicts among any members

Documents required for Sole Proprietorship Registration in India

Checklist requirements for conversion of a Private Limited Company to a Public Limited Company

    • The scanned copy of the aadhar card of the proposed proprietor of the sole proprietorship accounting. Aadhar card is necessary to register any business structure in India.
    • In addition to the Aadhar card, the PAN card of the proposed proprietor is also a mandatory document for a proprietorship business registration in India.
    • With a PAN card and Aadhar card, the proprietor of the business entity is liable to open a bank account in the name of his sole proprietorship firm.
    • Along with the above-mentioned documents, the individual would require identity proof and address proof for the registration process.
    • Documents needed for GST registration are also required to open a current bank account in the name of the company.
    • A proprietor of the sole trader ship firm can run his business activities at any rented place or owner place. The individual has to submit some of the proof of his registered office, documents such as:
      • If the registered office is owned property, any utility bill is required such as electricity bill, water bill, gas bill, etc. with the No Objection Certificate. The bill submitted should not be older than two months
      • If the registered office is rented property, then a lease/ rent agreement of the rented property along with the NOC from the owner is required.

The registration process of Sole Proprietorship Firm in India

A proposed person can choose any of the below mentioned options for the registration process:

  • SME Registration process
  • GST registration process
  • Registration as per the Shop and Establishment Act under the rules and regulations of that particular state

SME Registration Process for Sole Proprietorship Firm

As per the provisions of the MSME Act, any person requires registering as an SME (small and medium enterprise) to start a business. To complete setting up a sole proprietorship, the individual has to submit an online application. However, this is compulsory but is good for the company, as it can be used during the need of loan requirement at a low-interest rate. The government has also introduced many schemes for the improvisation of SMEs registered as per the MSME act.

 

SME Registration Process for Sole Proprietorship Firm

To register in the Shop and Establishment registration process, the person must own a shop and it is issued by the municipal parties depending on the number of workers or employees in the firm.