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Get started as a one-man business

Never let the businessman see down by giving your small business a shining name with sole proprietorship registration. It is extremely easy to start and run!

Price Starts RS @ 2,999 /-

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Sole Proprietorship Registration Process

Step 1
Prepare documentation
Step 2
Fill the application form
Step 3
Submit the application form
Step 4
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Sole Proprietorship Registration in India

What is Sole Proprietorship in India?

A sole proprietorship business in India is the simplest form of business structure that is owned, managed and controlled by the sole owner.  The sole proprietorship is not a legal entity rather it just refers to a sole person who owns the business and is personally liable for its debts.  This is one of the most popular forms of business structure for micro and small businesses operating in the unorganized sectors due to its simplicity, ease of information access and nominal cost. These factors combined have made getting certificate of incorporation for sole proprietorship a good idea.

However, getting certificate of sole proprietorship is generally not suitable for the medium scaled and large scale businesses due to the array of disadvantages like unlimited liability, no separate legal entity, non-transferability and limited life of the business.

The government of India has not prescribed any mechanism for the registration of sole proprietorship firm.  Thus, the registration of a proprietorship can only be recognized through tax registrations that the business is required to have as per the rules and regulations.  These tax registrations may include GST Registration that must be obtained in the name of the Proprietor to establish that the Proprietor is operating a business as a sole proprietorship.

How does a sole proprietorship firm registration differ from other business entities?

When you apply for sole proprietorship online, your idea of a business entity is different from the rest. You are not looking for a robust structure, but instead, you are a a looking for a freer way to conduct business.

 

Simply put, you think about firm registration for proprietorship because of the following differences it has from other business entities in India:

  1. No regulatory authority: Unlike most forms of business registrations in India, sole proprietorship doesn’t have any regulatory authority. There is no body, other than the standard income tax department watching over those with the sole proprietorship license – a term that we are using extremely loosely.
  2. No requirement of annual compliances: One that sets a Sole proprietorship is that there is no need of any annual compliances, unless you are discounting the annual income tax returns. In fact, many times people ask the question – do I need to register sole proprietorship in India?
  3. No one to hold your hand: Without no regulatory authority, there are not many rules you can follow. And without regulatory compliances, you don’t know the constraints within which you can do your business. You have to learn about everything on your own if you attempt proprietorship business registration in India.
  4. No agreement that dictates how you do your business: There is no memorandum of association for sole proprietorship. Traditionally, a memorandum of association is the core document that states the purpose of your business. While there is some sort of legal document during proprietorship registration online that states the business, it is not as robust as a Memorandum of Association or an LLP Agreement.
  5. No proprietorship registration certificate exist: A proprietorship firm registration certificate in India does not exist. Furthermore, there is no existence for any proprietorship register either. Then what is the proof of business ownership for sole proprietorship? In the absence of a proprietorship registration certificate, it can be extremely difficult. Isn’t it? Not really. All you need is a bank account in the name of your company and that will prove that you have registered a proprietorship firm online.
  6. No restrictions when it comes to naming a sole proprietorship firm: There is no concept of a firm name registration. You are allowed to give any name to your sole proprietorship – even your own name would suffice.

Because of so many lack of restrictions, there are benefits to be had when you register a sole proprietorship in India. 

What are the benefits of Sole Proprietorship Firm Registration?

After registration of a Proprietorship firm in India, you gain access to the following perks:

  1. The registration process is much easier: Because of a lack of a regulatory authority, you have to take a different approach for registering a sole proprietorship firm in India. The steps are pretty simple and all of them involve submitting an offline application in your regional office.
  2. There is a lack of regulatory requirements: Due to the lack of oversight, there are not many regulatory requirements for you to follow. You can just fill out your income tax returns each year – GST returns if you are earning more than enough – and you are good to go.
  3. Maintaining a business becomes easy: As a single owner business registration, A Sole proprietorship is very easy to manage. There are not many components for you to consider. In most cases, only small shops go for proprietorship business registration. And thus, other than taking care some of the backend finances, there is not much infrastructure you need to bother yourself with.
  4. Freedom to do business your way: As you can start your business solo, you are free to conduct your business in any way that you want. Consider a sole proprietor as a lone ranger in the forest of business entities that can conduct his business without being bothered by needless regulations.

 

Drawbacks of starting a Sole proprietorship registration in India

If you want to incorporate a sole proprietorship, then it is prudent for you to learn about its drawbacks as well.

  1. Limited Capital: When registering a sole proprietorship firm, keep in mind that you will be handling all the expenses of your business. And as a individual, raising funds would be difficult. It limits the capital that a sole proprietorship firm can have access to.
  2. Unlimited Liability: You are not different from the sole proprietorship. And as your firm isn’t a different entity from you, all the liabilities of your business falls on you. This factor of unlimited liability removes any sense of security from your business. You cannot afford mistakes – for they can mark the end of your business enterprise.
  3. Can’t exist without you: If you want to set up your business as a legacy, don’t register a sole proprietorship. As soon as you leave the proprietorship firm, your business entity ceases to exist.
  4. You can’t achieve business expansion: As running this business depends on a single person – you – don’t expect diversifications when it comes to doing business in India.
  5. Tax rates: Everything you earn will be taxed as person tax. Furthermore, being a sole proprietorship firm, your business entity won’t get many government benefits such as health insurance for your employees and more.
  6. Business limitations: Because of the infrastructure, or lack thereof, there is a limit to the type of business that you can do with your sole proprietorship firm. You cannot engage with complex enterprises; you must stay within your capabilities.

 

So you see, there are drawbacks when it comes to sole proprietorship company registration. But that doesn’t digress from the fact that it is still worth it.

Eligibility Criteria for Sole Proprietorship Registration in India

As the government doesn’t count Sole Proprietorship as a legal business entity, it has not given any discernible criteria to start one. Thus to get sole proprietorship, you need to adhere to all the following criteria:

 

  • You need to be a tax paying citizen of India: Online sole proprietorship firm registration is only for those entities that are running a local business. If you do, only then you can start a proprietorship firm. This business entity is deemed too free by the government of India and therefore, only those from India can start this business entity:
  • You need to obtain GST registration for your business name: If the annual turnover of your business is more than INR 40 Lakh, you must get the GST registration certificate in India. It will act as a proof for your business.
  • You need the bank account in the name of your proprietorship firm: One criterion for sole proprietorship firm certification is that you must open a bank account in the name of your proprietorship. It will help you conduct your business financial transactions properly.

Documents Required for Sole Proprietorship Registration in India

The documents required for registering a proprietorship firm entails the attachments that you need to get registrations that will give your business an identity.

Thus, you will need two things:

  1. Documents required for opening a bank account for your sole proprietorship;
  2. Documents required for GST registration for Sole Proprietorship.
  3. Documents required to obtain a PAN card.
  4. Documents required for Shops and establishment Registration

 

Documents required for opening a bank account of your Sole Proprietorship firm

  1. Proof of name: Provide a proof of the name of your Proprietorship firm.
  2. Proof of address: Provide details of the address details of the proprietorship firm
  3. Activity of concern: Provide the details about your business objective. You can either us an existing invoice or a detailed write up.
  4. Provide other business registrations: Send a copy of the registration certificates pertaining to your business to the banks.
  5. ITR return: Copy of last year’s income tax return
  6. Utility bills: Provide a copy of the utility bills to reinforce your address proof.

Documents required for GST registration

  1. Your PAN card
  2. Your AADHAR Card
  3. Your Photo Graph
  4. Your proof of address
  5. Your Bank Account Details

Documents required for PAN card:

  1. Your AADHAR card
  2. Your photograph
  3. Sample of your signature

Documents required for Shops and Establishment Registration

  1. Utility Bill of the firm
  2. AADHAR Card or VOTER ID Card or PAN Card
  3. Your Photograph
  4. Details of your business
  5. Architectural Blueprint of your business

Process for Sole Proprietorship Registration in India

Here is the answer to your question – how to start a sole proprietorship firm in India.

The procedure for Sole Proprietorship registration in India is as follows:

  • Choose the name of the business.
  • Check if the chosen business name is unique.
  • File the online application for GST registration
  • Upload the required documents.
  • Obtain GST registration certification few days after filing the application
  • Setup a bank account in the name of the sole proprietorship.

Note: There is no Sole proprietorship registration online. It is just a marketing term meant to lure. The truth is, to start a sole proprietorship, you need to physically pay a visit to the authorities and provide them with the documents.

Our Assistance in Sole Proprietorship Registration in India

We, at Registrationwala provide end to end solutions for Sole Proprietorship registration in India. Our services include:

  • Collection of basic document and information
  • Application drafting
  • Reviewing the application and making changes if needed
  • Obtaining the GST registration certificate and delivering it to you.
  • Helping you obtain Shops and Establishment Registration certificate

Registrationwala.com is a leading legal consultancy firm providing the comprehensive services relating to incorporation of a sole proprietorship. Our expert team will provide you full-fledged assistance required for the seamless registration of sole proprietorship firm. 

 

 

Frequently asked questions – Sole Proprietorship Firm Registration FAQs

Q1. What is Sole Proprietorship firm in India?

A sole proprietorship business in India is the simplest form of business structure that is owned, managed and controlled by the sole owner.  The sole proprietorship is not a legal entity rather it just refers to a sole person who owns the business and is personally liable for its debts. 

Q2. Where to register a Sole Proprietorship?

Sole proprietorship is registered by opening a bank account in the name of the firm. It can be done at any bank.

Q3.  What are the 6 Characteristics of a Sole Proprietorship?

  1. Easier registration process
  2. Not many regulatory requirements
  3. Lack of a business agreement
  4. Unlimited Liability
  5. Single Owner business

Q4. What are the documents required for Sole Proprietorship Registration?

Sole proprietorship in India requires the following documents:

Documents required for GST registration

  • Your PAN card
  • Your AADHAR Card
  • Your Photo Graph
  • Your proof of address
  • Your Bank Account Details

Documents required for PAN card:

  • Your AADHAR card
  • Your photograph
  • Sample of your signature

Documents required for Shops and Establishment Registration:

  • Utility Bill of the firm
  • AADHAR Card or VOTER ID Card or PAN Card
  • Your Photograph
  • Details of your business
  • Architectural Blueprint of your business

Q5. What is the procedure of Sole Proprietorship Registration in India?

  • Choose the name of the business.
  • Check if the chosen business name is unique.
  • File the online application for GST registration
  • Upload the required documents.
  • Obtain GST registration certification few days after filing the application
  • Setup a bank account in the name of the sole proprietorship.

Q6. What is considered a sole proprietorship?

A sole proprietorship registration in India is a single owner business entity.

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