Proprietorship
Easily setup a sole proprietorship with registrations, LEDGERS and business bank account.
Benefits
- Fewer legal formalities than LLP.
- Associated with the GST and income tax departments.
- Full control over the business for the sole proprietor.
- No separate business tax filings.
- Easy to disassemble.
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Easy Proprietorship Registration in India
Proprietorship registration is easy in India because, here, the proprietor is the only owner who manages and controls all operations in the firm. It suits micro, small and unorganised businesses such as small shop owners, parlours, street vendors, grocery stores, boutiques and more.
The single owner must bear all profits, losses, revenue, assets, debts and obligations of the business because proprietorship registration does not include a business partner. However, remember that this category differs from self-employment.
7 Steps to Register Proprietorship in India
You do not have to necessarily register a sole proprietorship in India. However, you are advised to do that because it provides your business with legal recognition and streamlines your business operations.
There is no direct procedure for registration of the sole proprietorship in India. You might not get a separate proprietorship registration certificate because it gets registered under your name. However, ensure that you have the documents required for sole proprietorship before moving ahead.
Step 1:
Select a Name for Your Sole Proprietorship Business according to the state law.
Step 2:
Get your PAN card and Aadhaar card ready as they will be used for your business identification.
Step 3:
Open a separate bank account in the name of your business.
Step 4:
Get the proprietorship GST registration done to provide a legal identity to your business according to specific thresholds.
Step 5:
Register your business under the Shop and Establishment Act if eligible.
Step 6:
Complete Udyam registration to benefit from various government schemes and get it recognised as a Micro, Small, or Medium Enterprise (MSME).
Step 7:
Follow the compliances such as income tax filing (ITR-3 or ITR-4), declaring business income, GST return filing (only if proprietorship GST registration has been done) and filing for TDS returns.
Documents Required For Sole Proprietorship
- Aadhar card and PAN card of the sole proprietor.
- Name and bank account details of the proprietorship.
- Registered office address along with the documents representing the right to use the property and ownership of the property.
- Proprietorship GST Registration (if business turnover is more than Rs. 20 lakhs) and the Shop and Establishment Act registration certificates.
Once you are ready with the required documents, you can continue with the Registration process.
Documents for Proprietorship GST Registration
- Bank account details of the business.
- PAN card, Aadhaar card and photograph of the sole proprietor.
- Rent or lease agreement in the name of the proprietor.
- Voter ID, passport and driving license of the proprietor.
Sole Proprietorship Registration Is Now Easy in India
| ADVANTAGES | DISADVANTAGES |
|---|---|
|
Fewer legal formalities than LLP. |
Small Growth Opportunities. |
|
Mainly associated with the GST and income tax departments. |
Difficulty raising funds and bearing all losses. |
|
Full control over the business for the sole proprietor. |
Risky future due to the absence of partners and successors. |
|
No separate business tax filings. |
Unorganised and unincorporated structure. |
|
Easy to disassemble. |
No centralised system to store the business information. |
Conclusion
A proprietorship is a straightforward business architecture with minimal requirements which is one of the advantages of sole proprietorship. It has a single owner who pays personal tax according to the business profits. Moreover, it does not have minimal capital requirements. From obtaining your PAN card to GST registration, your proprietorship registration might take over 10 days.
FAQs
What Types of Registrations Are Needed for Sole Proprietorship in India?
Generally, business registration is not compulsory for sole proprietorships. However, GST, MSME and the Shops and Establishment Act registrations might be needed for sole proprietorships in India, according to the state law.
What Will Be the Address Proof for My Proprietorship Business That I Run Online?
Mention your residential address proof if you are running your business from your home. If you have rented or purchased a place, mention the address proof of that place.
What Causes Delays in the Proprietorship Registration?
Slower payments or verification processes, insufficient, invalid or inaccurate information or regulatory approval permits are the causes of delays in registering a proprietorship.
What Types of Businesses Do Not Come Under Sole Proprietorship in India?
Businesses such as banking, telecommunications, defence and insurance might face some prohibitions.
How Do I Shut Down My Sole Proprietorship Company?
Cancel all registrations and agreements under the name of the business and pay off all liabilities to shut down your sole proprietorship business.
