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Sole Proprietorship Registration
Overview
A sole proprietorship is a type of enterprise in which business is owned and managed by an individual. In a sole proprietorship business, there is no legal/practical difference between the owner and the business. To put it in another way a sole proprietorship is not a separate legal entity. An owner is responsible for clearing off the debts of business. The sole proprietorship is a preferable and popular business form. It is simple and easy to form at nominal cost.
A sole proprietorship is a convenient and simplified way to commence a business in India. It is neither considered as a corporation nor a company and the business is wholly owned by a single person who is the owner/management/shareholder of the proposed entity.
An individual who wishes to sell his/her own products or services can run their business as a sole proprietor and can enjoy the rights provided to any other registered legal entity. Almost all the budding entrepreneurs, un-organized businesses and single handily running businesses in India, find it as an ideal business entity and have registered their business under it. The loss or profit of the company is considered as the loss or profit of the individual and the income of the company is considered as the income of the owner as per the Income Tax Act.
Registering a sole proprietorship business is a digital process that can be accompanied with the help of an expert.
Although, there is no particular concept or form of sole proprietorship, nor it is a recognised in term of law. However, an individual can select any of the below given options for registering itself as sole proprietorship.
Common forms of sole proprietorship modes in India:
- Udyam registration commonly referred as MSME Registration.
- Registration under Shop and Establishment Act as per the rules and regulations of the respective State/UT.
- GST registration.
- Trade License / Health Trade License.
Why should one choose a sole proprietorship firm?
A sole proprietor is one of the best choices for entrepreneurs who wish to handle everything on their own. Despite it, it has various benefits.
- Provides flexibility in carrying out business activities
- One of the oldest and easiest forms of business structures
- Single hand control
- Easy to start and close
- Hassle free business structures with very few compliances
- Self- Accountability
- Being your own boss means you are not answerable to any shareholder/director
- Decision-making power
- Don’t have to share your income and profits with anyone
- No disputes between the members
Benefits of a Sole Proprietorship Firm
Every business structure has its own benefits. Some of the specific benefits of a Sole Proprietorship Business are:
- Individual’s Investment
To start a sole proprietorship business, an individual who acts as a sole proprietor can invest his personal assets, other financial resources or can borrow money to commence the business activity.
- Ownership
A single person has the hold on the entire business and is the owner of the firm. Further, that person can transfer the ownership through a will or last testament as per his/her wish.
- No Profit or Loss Sharing
All the income generated or the loss or debt incurred by the company belongs to the owner, and he/she cannot share it with someone else.
- Unlimited Liabilities
This feature sometimes acts as a flaw. Since business and the owner are no separate identity, personal property of the owner can be used to pay the debts of the business.
- Fewer Formalities
With the ease of commencement, sole proprietorship comes with a few formalities before and after registration. - Control Power
Control power is in the hands of a single person, and he/she is not answerable to anyone else. The person should be capable of using his skills, expertise, and intelligence to carry on business activities.
Documents required for Sole Proprietorship Registration
Scanned Copy of:
- PAN & Aadhaar of the proprietor
- Passport size photograph of the proprietor
- Utility Bill of the premises address
- No objection certificate from legal owner of premises address
- Any other document, as required
Information Required:
- Email Id & Phone No. of the proprietor
- Main Business Objects of the sole proprietorship
- Banking Details
- Number of Employees
- Any other information, as required
Startup sampark procedure for Sole Proprietorship Registration
Sole Proprietorship Registration is very detailed procedure, which requires keen knowledge, procedure and team of professionals. Each Sole Proprietorship has its tailored requirements. We at Startup Sampark have a full-fledged, dedicated team of professionals. You are required to fill the form and then our experts will reach out to you, to know the exact requirement and gather further information. Then our experts at STARTUP SAMPARK will be at your disposal for assisting you with guidance concerning Sole Proprietorship Registration and its compliances. Our professionals will assist you in planning seamlessly at the least cost, confirming the successful conclusion of the process. We shall guide you with Do’s and Don’t’s as well. We will begin working on your request once all the information is provided, and the payment is received.
Why STARTUP SAMPARK?
Startup Sampark is one of the platforms which coordinates to fulfil all your Secretarial, Legal, Licensing and Taxation requirements and connect you to consistent professionals. Our team consist of Chartered Accountants, Company Secretaries, Cost Accountants, Advocates, Patent and Designs Agents, Trademarks & Copyright Attorneys, Paralegals and other legal professionals.
We are a management consultancy and technology platform to simplify legal and business related matters. We are committed to help start-ups, small business owners and non-compliant businesses in solving their legal, secretarial and taxation compliance related to setting up and running the business smoothly and compliantly.
Our clients can also track the assignment progress at all times through a dedicated portal provided to you along with User Id and Password. You can comment and find the resolution and ask questions on the dedicated portal provided to you. If you have any questions about the Sole Proprietorship and registration process, our experienced representatives are just a call away.
- Step 1: Fill the query form.
- Step 2: Our Expert will connect with you
- Step 3: Make payment through hassle free payment portal
- Step 4: Get confirmation on mail and receive User Login and password
- Step 5: Submission of documents with us on our client portal
- Step 6: Executive will process your application
- Step 7: Track progress of your order all the time on our client portal
- Step 8: Greetings, Order completed
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FAQs
A sole proprietorship is a type of enterprise in which business is owned and managed by an individual. As there is no fixed definition of it, commonly recognized registration can be included in it.
- Udyam Aadhaar (Commonly known as MSME Registration)
- Registration under Shops & Establishments Act
- GST Registration
- Other form of recognized registrations like Food license, Trade License, Performance License, Trademark etc. can also be part of it.
Most of the banks ask for a registration of Shops & Establishment Act Registrations. Other than this, you might need copy of Aadhaar, PAN card, proof of your business existence (like Utility bills) and address & identity proofs, other KYC documents, as required.
It usually takes around 1 – 30 days, depending on what type of registration one wants to opt. This is one of the reasons it a popular type of business among merchants and traders. Timelines also varies from state to state.
Business like grocery stores, manufacturing businesses, small traders and fast-food vendors are most common to be sole proprietorships. Although bigger businesses can be sole proprietorship but it is not recommended as it would be hard to manage alone.
Yes, most of the registrations mentioned are available online making it moderately online process.
The greatest benefit of this kind of firm is that it is the least complex and the cheapest form of the business form of doing business. Also, it makes your business more credible and brand able.
Tax slab will remain as that of individual’s.
Sole Proprietorship Firm is best suited for unorganized and small businesses. The reason being the ease of incorporation and minimal compliance requirements.