Sole Proprietorship registration in India is for one owner business. Sole proprietors manage profits and income tax under their own names or a trade name. It’s a common choice for small businesses and individual entrepreneurs.
When a business is owned and governed by one person, it is called a sole proprietorship company. This type of business can be incorporated in fifteen days and hence makes it one of the most popular types of business to begin in the unsystematic sector, specifically among merchants and small traders. For a Sole Proprietorship business, registration is not required as it is identified through alternate registrations, such as GST registrations. However, its liability is unlimited and it also doesn’t have perpetual existence.
Our experts give you professional guidance on many of the processes involved in registering your business as a sole proprietorship, along with registration of service tax, sales tax, import/export code, and professional tax.Sole proprietorship firms are easy to set up and operate. There are no formalities to be followed for setting up a sole proprietorship firm, which makes it a popular choice among small business owners.
Proprietors are required to file income tax returns every year, if their total income exceeds ₹ 2.5 lakhs (for individuals below the age of 60 years) or ₹3 lakhs (for individuals above the age of 60 years).
Proprietorships with a turnover of more than ₹ 20 lakhs are required to register under GST. They are required to file monthly and annual returns, and collect and remit GST on their supplies.Proprietorships that have employees are required to register under the Shop and Establishment Act of the respective state. This Act regulates the working conditions of employees, such as the hours of work, wages, and leave.Proprietors who are engaged in certain professions, such as lawyers, doctors, and chartered accountants, are required to pay professional tax. The rates of professional tax vary from state to state.
Proprietorships that operate from a physical location are required to obtain a trade license from the local authority. The requirements for obtaining a trade license vary from city to city. There are a number of other compliances that may apply to proprietorships, such as environmental regulations, labour laws, and pollution control laws. The specific compliances that apply will vary depending on the nature of the business.
A DSC is a secure digital key that is used to sign electronic documents. It is mandatory for businesses to obtain a DSC before registering their business with the Registrar of Companies (ROC).Prepare the registration documents. The registration documents will vary from state to state. However, they will typically include the following Submit the registration documents to the ROC. The ROC will review the documents and approve the registration of your business.Obtain a trade license from the local authority. If you are operating from a physical location, you will need to obtain a trade license from the local authority. The requirements for obtaining a trade license vary from city to city.Once your business is registered, you will be required to comply with a number of laws and regulations, such as income tax, GST, and the Shop and Establishment Act.
Any Indian citizen with a current account in the name of their business can initiate a sole proprietorship. Registration may or may not be necessary, depending on the planned business type.
Sole proprietorships are commonly chosen for small businesses and individual enterprises, such as grocery stores, chemist shops, salons, and other ventures operated by a single individual.
The timeline for establishing a sole proprietorship can vary, typically taking between 5 and 15 business days, depending on the specific requirements and authorities involved in the process.
