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Sole Proprietorship

All you need to know

What is the meaning of Sole Proprietorship?

A sole proprietorship firm means a type of business entity that is owned, controlled and managed by a single person. The owner of the Business is called Sole Proprietor of the Firm. As the business is run by a natural person, there is no legal difference between the promoter and the business. The promoter himself receives all the profits. Sole Proprietorship firm does not require any formal registration.
The key feature of sole proprietorship firm is that it is very easy to start as there are less legal formalities and lesser formation costs involved.

Sole Proprietorship Firm Registration:

The government of India has not prescribed any sole proprietorship firm rules and regulation in India or there is no registration mechanism for Sole Proprietorship Firm registration.
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 and/or SSI/MSME / Udyam Aadhar Registration that should be obtained in the name of the Proprietor to establish that the Proprietor is operating a business as a sole proprietorship.

Why CA Agrawal Kanhere as your service provider for Sole Proprietorship Firm Registration?

info@caagrawalkanhere.com is an eminent business platform and a progressive concept, which helps end-to-end incorporation, compliance, advisory, and management consultancy services to clients in India and abroad. Incorporating a Proprietorship Firm is easy, seamless, cheapest and quickest with info@caagrawalkanhere.com! Apart from a Proprietorship Firm, info@caagrawalkanhere.com also helps entrepreneurs with Private Limited Company Registration, Public Limited Company Registration, Partnership Registration, HUF, One Person Company and LLP Registration easily. You may get in touch with our compliance manager on 07552761432 or email info@caagrawalkanhere.com for free query.

Compliance required by Proprietorship firm

All you should know about compliance of Proprietorship firm

GST Registration

GST registration is one of the ways to get a proprietorship registration done. You can get yourself registered under GST if your annual turnover is more than Rs. 40 lakhs. Also, if you are doing online business (selling through amazon, flipkart etc.), you are required to get a GST number under goods and service tax Act.

GST Return

The proprietorship firms registered under GST are required to file the GST return on a monthly, quarterly and annual basis. GST return is a document that contains the details of the income of the taxpayer. As filing of GST returns is mandatory for all the registered Taxpayers including Partnership firms.

MSME registration

You can get yourself registered as Small and Medium Enterprise (SME) under the MSME Act. The application can be filed electronically. Although it isn’t compulsory to register as an SME, it is highly beneficial, especially at the time of taking loan for the business. Also getting Udyam Aadhar Registration will be very beneficial.

Accounting

The accounting for a sole proprietorship does not require a separate set of accounting records, since the owner is considered to be inseparable from the business. Nonetheless, it is always advisable to maintain records for business activities of a Proprietorship firm, in order to judge whether these operations are generating a profit.

IT Return

Income tax filing must be filed by all proprietorship having a taxable income over the exemption threshold. In some cases, a tax audit would also be required. Since proprietorship is considered to be one and same as the proprietor, the income tax return filing procedure for a proprietorship is similar to individual income tax return filing.

Tax Audit

There is no obligation for a sole proprietor under any law to get the accounts except in case where the turnover of a proprietary business in any financial year exceeds 1 Crores Rupees and gross receipt from profession exceeds 50 Lakhs Rupees. In both cases, the audit of accounts is compulsory for a proprietor under the Income Tax Act.

Documents Required for Proprietorship

Quick Checklist

Photograph
PAN Card
Self-Attested ID Proof of all the Directors (Driving License/Passport/Voter ID)
Electricity Bill or any other utility bill for the address proof

Key features of Sole Proprietorship Firm

Points to make your decision easy

Decision Making

Control over all business decisions remains in the hands of the owner. This ensures quicker business decision making and hence, faster execution. Owners have complete and direct control over all decision making.

Easy To Start

The registration process for starting a sole proprietorship firm is very easy compared to other business structures. One can get Registration Certificate within 1 working day. Obtaining a GST registration is also very quick and easy.

Easy to close

The dissolution or sale of the Proprietorship firm is very easy. As there is no legal distinction between the proprietor and the proprietorship firm, not much regulatory formalities are required for closing of a proprietorship.

Tax benefits

The owner of a sole proprietorship is not required to file a separate business tax report. The business will be taxed at the rates applied to personal income, and not corporate tax rates. This means huge tax savings.

Self employment

The owner of Proprietorship firm, himself is self-employed and this creates various employment opportunities. Also because the owner is in the hands of a single person, there are fewer chances of leakage of business secrets.

Inexpensive

A Sole Proprietorship registration is inexpensive as compared to all other forms of organizations. Also on account of the minimum compliance requirements, it proves to be an advantage as it is inexpensive even in long run also.

How to start Sole Proprietorship?

5 Easy Steps for Sole Proprietorship Registration

1

Complete a Checklist

2

Submit documents

3

Verification of Documents

4

Obtain Registration Certificate

5

Obtain PAN and TAN

Registrations for Proprietorship firm

All you need is Aadhar and PAN card to get started. You can choose any name of your choice. However, this should not be an existing name in the Trademark Registry. Based on your documents and discussion with you, our experts will guide you as to what registrations to obtain.

Udyog Aadhar Registration

Udyog Aadhaar is a registration for all micro, small and medium-sized businesses. Udyog Aadhaar registration along with a tax registration may be used for the opening of bank account. Trough this various subsidies from government can also be enjoyed.

GST Registration for firm

As per the nature of business and requirement, Our team will process for GST registration in the name of your sole proprietorship firm. For this you will need to provide some documents like aadhaar card, PAN card etc. This certificate will help you open a current bank account easily.

FAQs On Sole Proprietorship

Get answers to all your queries

Any Indian citizen can start a sole proprietorship firm.

Most local businesses are run as a Sole Proprietorship, from your grocery store to a fast food vendor, and even small traders and manufacturers. This is not to say that larger businesses do not operate as sole proprietors.

Thanks to Government of India’s digital initiatives, all registrations are completely paperless and online. We provide all services online so that you don’t need to move an inch from your office or home.

To open a current account, you need proof of the existence of your business. Many banks will ask for MSME registration and/or GST Registration. In addition, you will need a PAN card and address and identity proofs.

You can always choose to do so. The procedure is very simple. It is very common for sole proprietors to convert into partnerships and private limited companies at a later stage.

Reviews

Sunil Tomar

CA Agrawal Kanhere team members are very helpful in the entire process of GST filing. I really appreciate their support superb team. Cheers!!!!*****

Sole Proprietorship

Sole Proprietorship

What is the meaning of Sole Proprietorship?

Sole Proprietorship Firm Registration:

Why CA Agrawal Kanhere as your service provider for Sole Proprietorship Firm Registration?

Compliance required by Proprietorship firm

Documents Required for Proprietorship

Quick Checklist

Key features of Sole Proprietorship Firm

How to start Sole Proprietorship?

1

2

3

4

5

Registrations for Proprietorship firm

Udyog Aadhar Registration

GST Registration for firm

FAQs On Sole Proprietorship

1. Who can start a Sole Proprietorship?

2. What are businesses commonly run as Sole Proprietorship?

3. Is registration online or I have to submit any documents to the government office?

4. What documents are needed for opening a current account in the name of my Sole Proprietorship?

5. What if I wish to convert from Sole Proprietorship to a Private Limited Company or Limited Liability Partnership?

Reviews

Sunil Tomar