A business owned & managed by one person is known as a Sole proprietorship business. It is one of the most popular businesses specifically started by small traders & merchants. Registration is not necessary in the case of sole proprietorship except GST registration. In sole proprietorship firm, all the profits & losses are handled by one person only i.e. the owner of the sole proprietorship firm. Therefore, it has unlimited liability. Sole proprietorship firm does not benefit from the feature of perpetual existence and has a minimal tax advantage. Easily register a sole proprietorship online with Finacbooks. We provide the sole proprietorship registration process and guide to how to register a sole proprietorship firm in India.
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 owned by a single person who is the owner/director/shareholder of the proposed entity. Some common examples of proprietorship business is shops such as chemist, saloons, grocery, etc. 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 a registered legal company. Most of the entrepreneurs 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. However, a person interested in registering as a sole proprietorship requires fulfilling some basic requirements like opening a bank account in the name of the business entity, etc.
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.
Aadhar Of The Proprietor:
The proprietor of the proposed firm has to submit a scanned copy of his/her aadhar card. Aadhar card is required to register any business in India. A person cannot file Income-tax return unless his/her PAN card is linked with aadhar card. In case you don’t have an aadhar card or its information does not match with PAN card, get it corrected before the submission.
PAN Card Of The Proprietor
In addition to Aadhar card, PAN card is also a mandatory document for a proprietorship business registration. PAN card is issued by the Income-tax department t of India which contains a unique PAN card number. All the details of the prerequisite documents should match with the details of the PAN card.
Current Bank Account Details
If the proprietor owns a PAN and Aadhar card, then he is liable to open a bank account in the name of his company. In addition to these documents, he would require identity and address proof. Documents regarding GST registration are also required to open a current bank account.
A proprietor can carry out his business activities at any owned or rented place. He has to provide proof of his registered office, documents worked as proof are:
In case of owned property: any utility bill such as electricity bill, gas bill, water bill, etc. along with the NOC. The bill should not be older than two months
In case of Rented property: lease/ rent agreement along with the NOC from the landlord.
Additionally, few registrations given as follows are required for the registration purpose of the proposed firm:
Individual requires registering as an SME (small and medium enterprise) as per the provisions of the MSME Act. For it, you have to submit an online application. However, it is not compulsory but is beneficial for the company, especially during the time of loan requirement at a low-interest rate. The government has launched various schemes for the improvisation of SMEs registered under MSME act.
Shop And Establishment Registration
Individual must have shop and establishment license as per the local laws. It is issued by the municipal parties based on the number of workers/ employees in the firm.
Registration Under GST
GST registration is mandatory to carry business activities in India. Even if you are doing online business, you would require a GST number. GST registration can be done in 5 working days with the following documents:
• PAN Card of the proprietor
• Aadhar Card of the proprietor
• Passport size photograph of the proprietor
• Office proof
• Bank Statement copy that contains bank account number, IFSC code, and address
• One has to file annual Income Tax returns on time.
• One has to file his GST in case they have GST registration
• If liable for TAX audits, the individual should deduct TDS (tax deducted at source) from employees income and file TDS returns.
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