Sole Proprietorship Registration Online in India
Start and run a business by yourself, making all the decisions and keeping all the profits.
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Four Steps to Get Your Proprietorship Registration
Fill the Form
Provide business details
Add to cart
Pay the required fee online
Submit Documents
Upload required papers
Certificate delivery
Official Document Delivery
Find the best plan for your needs
Basic Plan
+GST
- Shops & Establishment License
- Trade license
- Current Account Opening Support
Premium Plan
+GST
Standard Plan
+
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- GST Registration
- Business Letterhead (50 copies)
- Business Seals
Overview of Sole Proprietorship
A sole proprietorship in India is one of the most straightforward and common forms of business ownership. It is owned and managed by a single individual, who is solely responsible for all assets and liabilities. This type of business is easy to start with minimal regulatory compliance, making it popular among small traders and merchants.
The sole proprietor has complete control over the business decisions, but this also means unlimited liability, meaning personal assets can be used to satisfy business debts. While it offers the benefit of direct tax benefits, as the income is treated as the individual’s personal income, it lacks the continuity and fundraising capabilities of a corporation or partnership.
A sole proprietorship in India is one of the most straightforward and common forms of business ownership. It is owned and managed by a single individual, who is solely responsible for all assets and liabilities. This type of business is easy to start with minimal regulatory compliance, making it popular among small traders and merchants.
The sole proprietor has complete control over the business decisions, but this also means unlimited liability, meaning personal assets can be used to satisfy business debts. While it offers the benefit of direct tax benefits, as the income is treated as the individual’s personal income, it lacks the continuity and fundraising capabilities of a corporation or partnership.
Who can opt for Sole Proprietorship?
Sole proprietorship is ideal for individuals who want full control over their business and are willing to bear the entire financial responsibility.
Individual Entrepreneurs
Freelancers and Consultants
Home-Based Business Owners
Tradespeople and Artisans
Small Retailers and Shop Owners
Professionals Starting Their Practice
Individual Entrepreneurs
Freelancers & Consultants
Home-Based Business Owners
Tradespeople & Artisans
Small Retailers & Shop Owners
Professionals
Minimum Requirements
In India, starting a sole proprietorship involves minimal requirements, making it an appealing option for many small business owners.
Business Name
PAN Card
Bank Account
Local Licenses & Permits
Advantages & Disadvantages
The following documents need to be scanned and attached for LLP Incorporation
Easy to Start
Setting up a sole proprietorship in India is straightforward with minimal legal formalities and paperwork.
Complete Control
The owner has full control over all business decisions and operations, allowing for quick and flexible decision-making.
Tax Benefits
In a sole proprietorship, business income is taxed as the individual’s personal income, often leading to a simpler tax process and potential tax advantages.
No Profit Sharing
The owner enjoys all the profits of the business without having to share them with other stakeholders.
Confidentiality
Since the business is not a separate legal entity, financial statements and other sensitive information do not need to be publicly disclosed.
Simplified Banking and Accounting
Banking and accounting can be less complex as they can be managed through the owner’s personal bank account.
Advantages & Disadvantages
The following documents need to be scanned and attached for LLP Incorporation
Unlimited Liability
The owner is personally liable for all business debts and legal obligations. Personal assets could be at risk in the event of business failure.
Limited Resources
Raising capital can be challenging as sole proprietorships typically rely on personal funds or loans, limiting expansion opportunities.
Less Credibility
Compared to incorporated businesses, sole proprietorships might have less credibility with suppliers and financial institutions.
Difficulty in Transferability
Transferring ownership or raising investment can be more complex and often requires changing the business structure.
Limited Life of the Business
The business entity does not survive the owner. If the owner decides to stop the business or passes away, the business ceases to exist.
Tax Slabs
Although taxation is simpler, in some cases, sole proprietors might end up paying more taxes as personal income tax slabs can be higher than corporate tax rates.
Documents for Sole Proprietorship Registration
The following documents need to be scanned and attached for Sole Proprietorship Registration
Identity & Address Proof of Sole Proprietor
Registered Premises Documentation
Identity & Address of Sole Proprietor
Scanned Copy of PAN & Aadhaar/Driving License/Passport/Voters ID
Copy of Recent Utility Bills or Bank Statement (Not Older Than 2 Months)
Digital Passport-Size Photo
Email ID & Phone Number
Registered Premises Documentation
Copy of Recent Utility Bills (Not Older Than Two Months)
Scanned Notarized Rental Agreement (English Version)
Scanned No-Objection Certificate from Property Owner
Scanned Copy of Sale/Property Deed in English (For Owned Property)
Scanned Copy of PAN & Aadhaar/Driving License/Passport/Voters ID
Copy of Recent Utility Bills (Not Older Than Two Months)
Copy of Recent Utility Bills or Bank Statement (Not Older Than 2 Months)
Scanned Notarized Rental Agreement (English Version)
Digital Passport-Size Photo
Scanned No-Objection Certificate from Property Owner
Email ID & Phone Number
Scanned Copy of Sale/Property Deed in English (For Owned Property)
Note: The registered office for your business can be a residential address; it does not need to be a commercial space.
Sole Proprietorship Setup Procedure in India
Incorporating a Sole Proprietorship in India involves a series of steps
Selecting a Name: Choose a unique and relevant name for your business. There’s no formal process for registering the business name for sole proprietorships in India, but it should not infringe on existing trademarks.
Trade Name: If the business name is different from your own name, consider using it as a trade name in business dealings.
PAN Card: As a sole proprietor, your personal PAN card will serve as the PAN for your business. If you don’t have one, apply for a PAN card through the Income Tax Department.
Tax Registration: Your tax obligations will be tied to this PAN, as the income from the business is considered your personal income.
In addition to the basic requirements for registering a sole proprietorship in India, there are several other registrations and compliances that a sole proprietor may need to consider, depending on the nature and scale of the business. These include:
Note: This structure is ideal for individuals who want to test a business idea, work independently, and have a lower-risk business model. However, if you plan to have partners, need external funding, or want personal liability protection, you might consider other business structure
From GST to ITR
A sole proprietorship in India must comply with various regulations depending on the nature of the business, its location, and turnover.
If the turnover of the business exceeds the threshold limit (currently Rs. 20 lakhs for service providers and Rs. 40 lakhs for goods suppliers, with variations for special category states), GST registration is mandatory. The proprietor will need to file monthly, quarterly, or annual GST returns based on the type of registration and turnover.
Local municipal authorities require businesses to obtain a trade license. The requirement for this license varies by locality and type of business. It is essential for legally operating a business within municipal limits.
This tax is levied by the state governments on all professions, trades, and employments. The rules and rates differ from state to state. Sole proprietors need to register for professional tax if they have employees or if they themselves are engaged in any profession.
This license is mandatory for all business entities that operate within the premises of a shop or commercial establishment. Registration under this Act is compulsory within 30 days of starting a business and helps in regulating conditions of work and employment.
A sole proprietor must file an annual income tax return. The income from the business is taxed as personal income, and the proprietor needs to comply with the IT rules, which may include paying advance tax if applicable.
Depending on the specific sector the business operates in, other compliances such as FSSAI licensing for food businesses, Import Export Code (IEC) for trading businesses, and environmental clearances might be required.
How V Smart Auditor can help ?
Our expert team at V Smart Auditors is committed to making your Sole proprietorship Registration process as seamless as possible. Here’s what you can expect when you choose us as your partner:
