25 Jun 2022
It is way easier to form as compared to others and also require less formalities related to registration from an authority. It is mostly suitable for entrepreneurs whose main motive is to work independently without any legal boundations and obligations. Sole Proprietorship business model gives complete right to an individual to run their business at their own discretion. Here, in this blog we will be discussing the complete procedure for Sole Proprietorship registration.
Sole Proprietorship is basically one of the most popular business structures in India. Unlike other companies, it adheres to minimal compliances that make the business journey more seamless. It is the type of business structure where one person is responsible for handling the entire business affair. Sole Proprietorship doesn’t allow outsiders to intervene in the business proceeding or any other aspects unless the owner wishes them to do so.
Establishing a new business can be hectic for anyone. Starting from tedious paperwork to the procurement of manpower, one has to look into every aspect of the business model while taking the budget and foreseeable liabilities into account.
In most people's opinion Sole Proprietorship can be the best business. Here, in this article, we would explain the advantages and disadvantages of Sole Proprietorship registration. Sole Proprietorship is perhaps the easiest form of the business in regards to establishment procedure and tax liabilities. It could be formed with minimum paperwork and short of any formal registration. This business model is primarily adopted by those who prefer to work alone and reap more profit by averting tax liabilities.
A sole proprietor is the owner of the sole proprietorship, he is recognized as an entity same as that of business. As the sole proprietor is the owner of the business he is entitled to all the company’s revenue. It is completely under the control of the proprietor. Hence, he/she makes the decisions for the company.
To run a business as a sole proprietor some licences and permits are required. The licence will depend on the industry, state, and locality.
Document you will get after proprietorship registration:
Post incorporation of your sole proprietorship firm, you’ll receive the following documents:
Time Required for proprietorship registration:
On average, it takes around 7-10 working days for registration of a sole proprietorship firm in India subject to document verification by the concerned authorities.
1. GST Registration
2. MSME Registration
3. Shop and Establishment Act Licence
Starting a sole proprietorship in India is easy if all the compliances are properly met.
· Decide on the suitable business name.
· A suitable business location designated as the place of doing business should be selected.
Shops and establishment registration
The Shop and establishment licence covers all the business entities such as the shops, restaurants, commercial establishments, the retail trade/ business, profit-making organisations, public amusements, and so on. Irrespective of any business establishment whether fully functional or not it is necessary to get the business registered. The local municipal corporation issues this licence and it depends on the number of employees in an establishment.
GST has replaced many indirect taxes such as the service tax, Value added tax, Central sales tax, excise duties, additional customs duties, and so on. An individual making the interstate supply of goods and services and having an annual turnover of over Rs.40 lakh is required to get GST registration.
Getting a GST registration makes the business legally recognized as the supplier of services or goods. Small businesses can also opt for the composition scheme to lower the tax rates. Which has reduced the taxation and the compliance burden significantly. For certain businesses getting GST registration is mandatory. According to the GST Act, penalties are applicable if a business is operating without a GST registration.
Udyog Aadhar Registration
Udyog Aadhar Registration is provided to the Micro, small, and medium-sized businesses in India under the Micro, small, and medium enterprise development Act,2006.
Earlier recognized as MSME registration, the process of obtaining the Udyog Aadhar registration is completely online. The major objectives of the Udyog Aadhar registrations are as follows:
TAN or the Tax Deduction Collection Number is a mandatory ten-digit number required for all persons who are supposed to pay the Tax deduction at source or TDS on behalf of the Government.
The person deducting the tax at the source must deposit the deducted tax to the central Government to quote the TAN number.
Salaried individuals are not required to obtain TAN or deduct tax at the source. A proprietorship business and other entities must deduct tax at the source, making certain payments like salary, payments to the contractor or the subcontractors, amount of rent exceeding 1,80,000 per year, etc. On deducting the TDS, the entity with TAN registration will issue a TDS certificate as proof of collection of tax.
FSSAI registration should be obtained from the Food Safety and Standard Authority of India in the proprietor's name if he is involved in the selling of food products or handling of the food products.
Here is a list of documents required for FSSAI registration:
Supporting Documents (if any):- NOC by the Municipality or the Panchayat, Health NOC.
Trademark Registration is required in case you wish to trade your goods or services with a special name or brand. It is profitable where there is a threat of some misuse of the name or mark used in your business.
Benefits of Proprietorship Firm Registration:
Why to choose Legal tax for the sole proprietorship registration?
They have a well experienced team of experts that provide you the best solutions for your proprietorship registration and also guide you at every step.