Sole proprietorship registration is required for small business operation solely by one individual. Sole proprietorships are businesses owned and controlled by one individual.
Business is not regarded as a legal structure in this unorganised sector. In general, we provide businesses with some other basic registrations based on their type of business, such as Shop and Establishment registrations, GST, MSME, and food licenses, though there is no specific law for starting a sole proprietorship business.
Within five to seven days, Professionals law can help you start a proprietorship, depending on government processing time. Since proprietorships are not distinguishable from their owners, they do not require registration or approval. Our Company Counselors can advise you about the number of government approvals required to create the Proprietorship company’s identification.
Why proprietorship business is most common form of business?
A sole proprietorship known as a proprietorship is a popular choice for individuals starting their own businesses because of less documentations and compliances are required. As it involves minimal requirements and low costs, it is an attractive option for those looking to establish small or micro businesses. Due to the owner’s complete control over the business, decisions can be made without consulting shareholders or partners. Furthermore, sole proprietors benefit from direct ownership of profits and simplified tax filing, since business income is treated as personal income, avoiding double taxation as corporations do.
One major benefit of the sole proprietorship registration is its low regulatory burden. Unlike corporations, this business structure is subject to fewer government regulations, which simplifies management. Additionally, the ability to dissolve or modify the business easily is a significant advantage. This structure is well-suited for individuals in charge of small-scale enterprises such as freelancers, service providers, or local retailers, where the owner’s direct involvement is crucial. Although some may be deterred by the potential for unlimited liability and personal risk, others appreciate the convenience and independence that sole proprietorships offer for personal or specialized ventures.
Advantages of sole proprietorship registration.
• As compared to other types of businesses, proprietorship businesses have very little compliance, making them easy to establish.
• Cost of registration of sole proprietorship is cheaper than an OPC.
• A sole proprietorship is a business in which all assets and liabilities are owned by one individual
Documents Required for Sole Proprietorship Registration
• Aadhar of the proprietor
• A copy of the electricity bill/rent agreement for the business location
• Proprietor’s Pan Card
SOLE PROPRIETORSHIP REGISTRATION PROCEDURE
• Fill out our basic form or call us directly
• Send the required documents along with the specified professional fees.
• Verification of documents submitted.
• Deliver Registered Proprietorship along with all other registration certificates within the promised timeframe.
Does sole proprietorship need to be registered?
No, a sole proprietorship does not require formal registration under any specific law in India, as it is not a separate legal entity. However, depending on the type of business, proprietors may need to obtain relevant registrations, such as Shop and Establishment registration, GST registration, or specific licenses (like food licenses) for compliance.
What is the registration fee for a sole proprietorship in India?
There is no official “registration fee” for a sole proprietorship itself since it doesn’t require formal registration. However, proprietors may incur fees associated with obtaining other licenses or registrations relevant to their business type, such as GST, MSME (Udyam), or Shop and Establishment registration, with each registration having its own fee structure.
How to register sole proprietorship in India online?
To establish a sole proprietorship, you can apply for relevant registrations online, depending on your business needs. For example:
- GST Registration: Visit the GST portal and follow the steps for registration.
- Udyam Registration (MSME): Register on the Udyam portal to obtain MSME benefits.
- Shop and Establishment Registration: This varies by state, but most states offer an online process through their local labor department portals. It’s advisable to consult with a professional for guidance to ensure all necessary registrations are completed.
Alternatively,you can consult experts in the field for these certifications.
Is GST required for sole proprietorship?
Yes, if a sole proprietorship's firm turnover surpasses the GST threshold limit, which is now ₹20 lakhs for services and ₹40 lakhs for commodities, GST registration is required. Furthermore, companies who deal in interstate supply or work in particular industries might need to register for GST regardless of their turnover.
Can sole proprietorship have PAN card?
Since the business is not regarded as a distinct legal entity, a sole proprietorship does, in fact, employ the owner's personal PAN (Permanent Account Number) for tax purposes. For the purpose of filing income tax returns and other business-related financial transactions, the proprietor uses their PAN. However, since the company is run by a single person, the law forbids using a PAN in the name of the business.
What is the tax slab for sole proprietorship?
A sole proprietorship's income is taxed under the proprietor's individual income tax slabs since business income is considered personal income. This indicates that sole proprietors pay taxes in the same tax brackets as individual taxpayers, which vary from 5% to 30% based on total taxable income and whoch are updated as per finance bill of that year.
What is the charge of sole proprietorship?
In India, there is fixed charge to establish a sole proprietorship because formal registration is not required. However, the price may be charged to apply GST registration, shop and establishment registration, expenses for acquiring the necessary business permits, and any extra consulting costs if a professional is hired to help with the process.
Is Udyam registration mandatory for sole proprietorship?
Sole proprietorships are not mandatorily required to register for Udyam Certificate. Nonetheless, it is strongly advised that small and microbusinesses register on the Udyam portal as an MSME (Micro, Small, and Medium Enterprise). Access to government programs, rebates, and simpler financing alternatives are among the advantages of this registration.
Can a sole proprietor have 2 GST number?
Given that every state has its own GST registration requirements, a sole proprietor who runs their firm in numerous jurisdictions may indeed obtain multiple GST numbers. However, if the company deals in several product lines but operates in a single state then only one GST registration is needed.
Expert opinion
In order to receive the sole proprietorship registration without any delay and with no difficulties application should be filed keeping in view of all rules and regulations prescribed for any particular kind of business. For Instance, Application for food business being run by sole proprietor is to be appied keeping in mind whether GST registration is required or not and as Fssai license is mandatory that have to be applied as soon as possible. Likewise it depends on the business to business what types of registration we need to apply in order to get verified as sole proprietor.
