Proprietorship Concern

Best Suited For

• Small / Micro Businesses

• Testing / Dry Runs of Business Ideas

• Businesses running on the promoter’s name

Taking Charge of Your Business Destiny: Embrace the Entrepreneurial Spirit with Sole Proprietorship Registration

In India, a business with just one owner may register as a sole proprietor. A sole proprietorship is a type of business structure where an individual operates and owns the business. In a sole proprietorship, the business is not a separate legal entity from the owner. The owner is personally responsible for all aspects of the business, including its debts and liabilities.

This kind of business is among the most popular to start in the unsystematic sector, especially among merchants and small traders.

A sole proprietorship business does not need to register because it is recognised by other registrations, like GST registrations and MSME. Its liability is, however, unlimited, and its existence is not perpetual.

What's Included?

20% Discount on:

Benefits of Proprietorship Concern

Documents Required

Who Can Opt for Sole Proprietorship?

Anybody can choose this kind of business form if they want to start a company with less capital. It can be initiated within ten to fifteen days. Furthermore, you are the only one with authority over the business.

Advantages of Sole Proprietorship

The advantages of each business structure vary. Here is the list of the advantages of a sole proprietorship business.

Quite Simple To Establish

There is no registration procedure required of an applicant who wants to manage their business operations as a sole proprietor. To operate their business lawfully, they only need to obtain licenses or registrations specific to their line of work.

Seek Minimal Investment

The sole proprietorship model is popular among small businesses such as grocery stores, retail stores, and so on because it is advantageous for low-cost business ideas.

By incorporating as a private limited company, OPC can obtain capital at a significant cost, as opposed to the sole proprietorship model’s zero expenditure.

Adheres to minimal compliance

The sole proprietorship business model is unrestricted by any particular laws, allowing it to function without onerous compliance requirements. In the context of sole proprietorships, they are not required to obtain a Certificate of Incorporation or Registration Certificate because they are not considered separate legal entities distinct from their owners. A sole proprietorship is an informal business structure where the individual owner and the business are essentially one and the same.

Checklist for Sole Proprietorship Registration

The following is the checklist included under the sole proprietorship registration process.

A license or certificate granted by municipal authorities under the Shop & Establishment Act.
The Institute of Chartered Accountants of India issues licenses such as the Certificate of Practice, which is issued by registering authorities.
The Central Government or the State Government Authority/Department, etc., issues the registration or licensing document in the name of the proprietary concern.
The Importer Exporter Code (IEC) that the DGFT office issued to the proprietary concern may also be accepted by banks as identification when opening a bank account, among other things.
Complete the online income tax return in the name of the sole proprietor, ensuring that all of the firm’s income is reflected and that the Income Tax Authorities have duly authenticated and acknowledged it.
Utility bills in the name of the proprietary concern, including those for electricity, water, and landline telephones
The matter of obtaining a GST certificate or registration.

Compliances for Sole Proprietorship Firms

The compliances required to apply to a sole proprietorship include the following:

Income Tax Return Filing: The owner of a proprietorship is required to file a personal income tax return on form ITR-3 or ITR-4.
Business Income: The only income tax forms that allow for the declaration of business income are the ITR-3 and ITR-4. Consequently, all proprietorships have to file forms ITR-3 or ITR-4 to meet income tax requirements.
GST Return Filing: If a proprietorship is GST registered, it must file a GST return in line with the business’s registration plan every month and every three months.
TDS Returns: If a proprietorship employs people or spends more than a certain amount on goods and services, tax withholding at source is required, and TDS returns must be submitted every quarter.

Apart from the aforementioned aspects, the sole proprietorship might also have to adhere to extra rules based on its sector and area.

Why Choose CA Gandhi for Sole Proprietorship?

Access to Experts

We give you access to trustworthy experts and work with them to fulfill all of your legal obligations. Furthermore, you can always keep an eye on the developments on our website.

Realistic Expectations

We handle all the paperwork, so you can be sure that your interactions with the government will go smoothly.

100+ Strong Team

Unlock the power of expert legal guidance with our team of over 300 experienced business advisors and legal professionals. A simple phone call connects you to the best legal services. Your success, our expertise – just a call away.

How to Verify Your Proprietorship Status?

In theory, a sole proprietorship is not regarded as a registered entity.

Depending on the type of business, the sole proprietor must provide basic KYC documents, like as MSME registration or GST registration, in order to receive the appropriate certificates.

Documents Required for a Sole Proprietorship

List of the documents needed for sole proprietorship registration.

Photocopy of PAN card of sole proprietorship.
For the address proof, you need to submit the water or electricity bill.
Photographs (passport size).
A photocopy of your voter identity card or Aadhar card must be submitted as identification proof.
Regarding the Shops and Establishment Act, you must provide a rental agreement or a sale deed as proof of ownership.

Obtaining GST Registration for Proprietorship

To operate as a sole proprietor, you must obtain a PAN card for yourself, open a bank account in your firm’s name, obtain a Certificate of Registration under the relevant state’s Shop and Establishment Act, and register for GST. Subject to departmental approval and response from the relevant department, the registration process takes about ten days.

F.A.Q.

What happens if I choose to stop being a Sole Proprietorship and convert to a Pvt Ltd or Partnership?

It’s a slightly challenging process, but it can be done. At a later point in their business lives, sole proprietors frequently transform into partnerships or private limited companies.

Does a sole proprietorship need to comply with any regulations?

Indeed, a sole proprietorship firm is obligated to meet specific legal mandates, encompassing the filing of income tax returns, maintaining precise accounting records, and adhering to any industry-specific regulations. However, in comparison to larger entities, sole proprietorships typically face a lower compliance burden.

How much time does it take to set up a sole proprietorship business?

Establishing and operating a Sole Proprietorship firm takes no longer than 15 days. It is well-liked by small business owners and traders because of its simplicity. This is the additional rationale behind its widespread usage as a business structure.

Does a sole proprietorship have to be registered?

While not mandatory, it is recommended to formally register as a sole proprietorship. This registration provides several legal benefits, such as the ease of opening a business bank account and establishing a distinct identity, similar to that of a partnership or company.

Is being an Indian Citizen a prerequisite for being a sole proprietor?

Yes, a sole proprietor must be a citizen and resident of India. However, with the Indian government’s approval, foreign nationals are allowed to finance a sole proprietorship.

What distinguishes a one-person company (OPC) from a sole proprietorship?

There are two distinct types of ownership: sole proprietorship and one-person corporations. In a sole proprietorship, one person runs and controls the entire company. In contrast, an individual may begin an OPC following legal guidelines and regulations. Additionally, an OPC is listed with the Registrar of Companies.