Proprietorship Firm
A sole proprietor is also referred to as a sole trader. A single individual manages the business hence, the name sole proprietor. The process of sole proprietorship registration can either be offline or online
Sole Proprietorship Registration Online – Benefits, Process, Documents, Fees
Sole Proprietorship firm is the simplest form of business entity in India which is owned and managed by a single person. It is the easiest way of registering and starting a business.
Benefits of Proprietorship Firm Registration
- Minimal Compliances: A proprietorship firm has very minimal compliance requirements which makes it much more preferable option than One Person Company.
- Easy to Start: Sole Proprietorship is not governed by any law and does not require any mandatory registration. Hence, it is the easiest way of starting a business entity.
- Lower cost: As there are minimal compliances, there is no need to hire an auditor for meeting the legal compliance requirements.
- Complete control: As a proprietorship firm is owned by a single person, he has the complete control over the business decisions and there are no interventions of any kind.
Sole Proprietorship Firm Advantages
- No Compulsory Registration
- Shops and Establishments Act
- MSMED Act
- Goods and Services Act, 2017
- Shops and Establishments Act
- MSMED Act
- Goods and Services Act, 2017
- Limited Capital Requirements
- Minimum Compliance
- Single Individual
- No Sharing of Profits
- Easy to Register and Form
- Sole Decision Making
- Sole Authority
- Profit Making Power on Sole Owner
- Low tax liabilities
- Easy to control as managed by single promoter
- Freedom to choose any business name but not registered by a company
- Easy to start with the minimal registration process
- Easy to shut down the company with very less compliances
- Taxes – All business profits are personal income for a proprietor and pay self-employment tax on those profits
- Shops and Establishments Act
- MSMED Act
- Goods and Services Act, 2017
Procedure of Sole Proprietorship Firm Registration
- Application for GST Registration
- MSME Registration
- Application for Shop and Establishment License
- Bank Account Opening
Post Compliance requirements for Sole Trader
The following post compliance requirements have to be considered by a Sole Trader
GST Registration- If required-
20 Lakhs in the case for services
40 Lakhs in case of trading activities.
GST returns have to be made quarterly
- Intellectual Property Registration- if required-
- Trademarks
- Copyrights
- Designs
- Income Tax Filings
- Income Tax Returns Filings
- Tax auditing requirements and compliance
- Documentation of invoices for filing GST tax
- Financial Statements
Documents Required for Sole Proprietorship Registration
- Respective documents for registering with the municipal authorities
- GST Registration Certificate
- IEC Certificate
- Licenses granted by medical authorities, pharmaceutical and other authorities to carry out the business.
- FSSAI Registration and License Certificate
- Utility Bills- Such as electricity and water
- Rental Documents- in case the place is leased out, then NOC (no objection certificate) is required.
- PAN- Permanent Account Number
- Address Proof
- Bank Account information
- Aadhaar Card
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