The option of Sole Proprietorship firm registration is available to any individual who wants to run his own business. Consequently, it is one of the most popular types of business in India.
What Is a Sole Proprietorship?
A sole proprietorship firm is a business which is owned, regulated as well as managed by an individual. In addition to this, most individuals prefer this type of firm because of the following benefits:
- First of all, it has fewer capital requirements,
- Secondly, it has lower risks and
- Lastly, it requires a small team of employees.
Furthermore, in a sole proprietorship firm, there is no legal distinction between the proprietor and the business entity. That is to say, a sole individual himself can own and run this business. It ensures utmost privacy to its business owner. And not only this, the registration process does not involve much legal compliances.
Who is a Sole Proprietor?
A Sole Proprietor is a living person who is an individual owner of the sole proprietorship firm. Therefore, the only essential requirement for the owner of a sole proprietorship firm is that he must be a living person. This is so, because the owner of the sole proprietorship firm cannot be any corporate or legal entity.
How can TaxHelpdesk help you in your Sole Proprietorship firm registration?
Once your order is placed, TaxHelpdesk’s documents reviewing team will check the documents uploaded by you within 24 working hours. After reviewing documents, there will be an assigning of Tax Expert. Thereafter, the processing of your order shall take place. Apart from this, you also will be able to check the status of the order in your respective account.
Sole Proprietorship Firm Registration Procedure
The Sole Proprietorship Firm does not require any registration. In other words, this type of business can even start at home with minimal investment. Therefore, starting a sole proprietorship firm just requires the PAN Card of the proprietor.
Running a sole proprietorship firm may require trade licences, depending on the type of business to be run by the proprietor.
Trade Licenses for Sole Proprietorship Firm Registration
Documents required for registration of Sole Proprietorship
The Sole Proprietorship Frim registration requires the following documents:
– Firstly, 2 passport size photos
– Secondly, PAN Card
– Thirdly, Aadhaar Card
– Fourthly, address proof of place of business
– Lastly, trade licenses, if necessary
Time involved in obtaining registration of sole proprietorship
It does not take more than 15 days to obtain the sole proprietorship firm registration. The counting of days starts from the date of submission of relevant documents.
Advantages & Disadvantages of Sole Proprietorship
– Ease of governance
– Control over the business
– Faster decision making
– Tax advantages
– Minimum legal compliances
– Unlimited liability
– No corpotate status
– Not a separate legal entity
– No fund raising
– No perpetual succession
Any person can start a sole proprietorship firm. Moreover, an individual who is having less capital investment can also run his business through sole proprietorship.
To open a current account for a sole proprietorship firm, the proprietor has to abide by RBI regulations. As a result, the proprietor has to provide the following
- Firstly, two forms of registration for a proprietorship firm
- Secondly, PAN card,
- Thirdly, identity proof
- Lastly, address proof of the proprietor.
Any legal business can be Sole Proprietorship. The proprietorship businesses are run by small vendors are grocery stores, fast food vendors, manufactures, small traders etc.
A sole proprietor can run this type of business even at his home. Therefore, there is a minimum capital requirement to start a sole proprietorship firm.
A sole Proprietorship firm is an entity which is owned, regulated and controlled by a sole proprietor. Therefore, proprietorship firms cannot issue shares or have investors.
GST Registration is to be obtained if the turnover of the business exceeds Rs. 20 lacs (services) or Rs. 40 lacs (goods) in a year.