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What is a Sole Proprietorship Registration?

A Sole Proprietorship is an unincorporated business owned particularly by one person. It is not a legal entity but a description of a kind of business, so there are no formal papers required to create one. This registration can be identified by a GST Registration. It is known as the ‘GST Registration For Proprietorship’. The liability of Sole Proprietorship Firm Registration is unlimited and doesn’t have any perpetual existence. Moreover, With a sole proprietorship, the business and individual are the same.

Why choose Proprietorship incorporation in India ?

  • The profit solely belongs to the proprietor
  • The tax assistance avert double taxation
  • The owner is accountable only to file an annual tax return and pay tax as an individual
  • The owner has overall control and claims the ownership stake
  • Requires no minimum capital investment
  • No separate tax for the firm

Benefits of Sole Proprietorship :

  • Register sole proprietorship is the most easiest and cost-effective form of business to be set up and operate.
  • With a sole proprietorship, you have full ownership as you are the 100% owner of your business and get to make all the decisions individually.
  • It is ideal for start-ups, self-employed contractors, part-time, and home-based businesses.
  • It is much simpler to operate from a tax and accounting perspective because you don’t need to file a separate business tax return, all generated income from the business is reported on your personal tax form.

Checklist of Documents essential to open a new bank account for Proprietorship Registration

Proof of the recent establishment of your business

Shops and Establishment Act Registration

Photocopy of PAN Card

Address proof(electricity bill/telephone bill)

Identity proof(Aadhar card/driving license)

Essential Registrations for Sole Proprietorship:

  • The MSME Registration

It is not mandatory to get an MSME(Small and Medium Enterprise) registration, but it boosts the chances of the business to get leans and helps in other legal matters. The MSME registration can be applied through the online registration process on MSME official website.

  • A Shop and Establishment Act License

It is not essential for all sole proprietorship firms but almost all of the firms have to acquire this license, as per the local rule and regulations of the region of a business. The Shop and Establishment License is issued by the municipal corporation. It depends on the number of working employees, and it varies from state to state.

  • Goods and Services Tax(GST) Registration

It is essential if the annual turnover is more than Rs 20 Lakh and Rs 10 Lakh for businesses running in Northeastern states like Manipur, Nagaland etc. GST Registration is important for an online business or also for e-commerce portals such as Flipkart, Amazon, eBay, and much more. GST registration is to help the business owner to keep his/her taxation in record throughout all the transactions made in the name of the proprietorship firm.

FAQs

Who can be registered with an OPC?

OPC company registration can be done only by Resident Person. The term “Resident Person” here means a person who has stayed in India for a period of not less than 182 days during the immediately preceding financial year. Criteria of 180 days have been reduced to 120 days to allow Non-Resident Indians to operate OPCs in India and enjoy the unlimited benefits of a One Person Company (OPC).

The capital to start your own OPC is around 1 Lakh, but no need to be paid-up. So, this means you actually don’t need any investment to begin your business.

There are no tax benefits available as the tax rate is flat 30%,.

No not at all, you can show your rented home or own residential address as the registered office address of the company.

Nominee is the person who acts as legal heir of the business after any demise or incapacity of Director.

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