When a business is owned by one person, it is a sole proprietorship firm.
It is the simplest form under which a company can operate.
This business does not have any separate identity under the law.
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When a business is owned and governed by one person, it is called a Sole Proprietorship.
This type of business can be incorporated in fifteen days and hence makes it one of the most popular types of business to begin in the unsystematic sector, specifically among merchants and small traders.
For a Sole Proprietorship business, registration is not required as it is identified through alternate registrations, such as GST registrations.
However, its liability is unlimited and it also doesn’t have perpetual existence.
A certificate/license issued by Municipal authorities under the Shop & Establishment Act.
The registration/licensing document is issued in the name of the proprietary concern by the Central Government or the State Government Authority/ Department, etc.
The banks may also accept the IEC (Importer Exporter Code) issued to the proprietary concern by the office of the DGFT as an identity document for opening of the bank account etc.
Complete Income Tax return (not just the acknowledgement) in the name of the sole proprietor where the firm’s income is reflected, duly authenticated and acknowledged by the Income Tax Authorities.
The utility bills such as electricity, water, and the landline telephone bills in the name of the proprietary concern.
Issue of GST Registration/Certificate.
Our experts give you professional guidance on many of the processes involved in registering your business as a sole proprietorship, along with registration of service tax, sales tax, import/export code, and professional tax.
Our team will connect you with an established vendor who will book your application and also keep you updated on its status and progress.
The vendors we have onboard are well-accomplished and skillful in managing native registrations.
Our team will offer full assistance with the registration process.
This could vary between 5 and 15 days, depending on the task at hand for the authorities involved.
To start a Sole Proprietorship, the following documents are required
Address and identity proof;
PAN card, KYC documents; and
Rental agreement or sale deed (in case of Shops & Establishment Act Registration).
To open a current account, the following documents are required;
Proof of the existence of your business;
Shops & Establishments Act Registration;
PAN card;
Sole proprietorship firms are easy to set up and operate. There are no formalities to be followed for setting up a sole proprietorship firm, which makes it a popular choice among small business owners.
Sole proprietorship firms have minimal compliance requirements compared to other forms of businesses. They are not required to maintain any formal records or hold annual meetings.
Sole proprietorship firms are taxed as individual taxpayers, which means that the owner can claim deductions for business expenses and losses on their personal income tax return.
One of the most sought-after advantages of a sole proprietorship is the flexibility and freedom that the owners get. As a sole proprietor, the owner is free to make the choices for the business. The decision-making is entirely in the hands of the sole proprietor. Plus, sole proprietorships are not restricted to strict trade regulations or other complications. Sole proprietors can, thus, save the labor spent on complying with the trading regulations. So, the degree of flexibility in operations is more in sole proprietorships.
The owner of a sole proprietorship firm has full control over the business. They are free to make decisions without any interference from others.
Overall, a sole proprietorship firm is an ideal option for small businesses with minimal capital.
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