Overview
Sole proprietorship is kind of unregistered business structure, which is owned, managed and controlled by one person. Like other businesses, sole proprietorship is not considered as separate identity than its owner.
Instead of this, it represents an individual who owns business and bears all the responsibility including debts, obligations, losses and profits. This form of business is majorly adopted by micro and small business due to its simplicity and low establishment cost. Sole proprietorship is easy to start with the minimal regulatory compliances to operate.
Why
1. Easy and Inexpensive Setup: - Behind making it a popular Choice among people is that, sole proprietorship is easy to set up as there is no complex formalities and compliances to follow us, moreover it is also inexpensive.
2. Complete Control: - Being a solo owner of the business, you get a full control on business, this model of business allows you take independent decision.
3. Flexibility and Eligibility: - It is obvious that you get more flexibility in terms of business, you can adopt marketing changes quickly.
4. Privacy: - Since there is a solo owner of the business, so there is no privacy concern, there is no requirement to disclose your financials publicly. You can maintain all the accounts confidentially.
5. Retention of Profit: - Because you are the single owner of the business, so you are entitled to retain all the profit you generate.
6. Minimal Compliances Requirement: - As compared to other business models, sole proprietorship is having few regulatory and compliances to follow, it helps in saving time, money, resources and efforts
Process
- Select a Unique Name
- Udyam Registration, Udyog Aadhaar, and MSME
- GST Registration
- Tax Registration
- Establishment Registration
- Open a Bank Account
- Prepared Documents
- Obtain a Trade License from the Local Authority
Documents
Documents for opening a bank account: -
1. Proof of Name, Address, and Activity of the Concern
- Registration certificate (for registered concerns)
- Certificate or license issued by the Municipal authorities under the Shop & Establishment Act
- Sales and income tax returns
- Goods and Services Tax (GST) certificate
- Certificate or registration document issued by Sales Tax or Professional Tax authorities
- A license issued by the Registering authority (e.g., a Certificate of Practice issued by professional bodies like the Institute of Chartered Accountants of India, Institute of Cost Accountants of India, Institute of Company Secretaries of India, Indian Medical Council, Food and Drug Control Authorities, etc.)
2. Income tax return
3. Utility bill
Documents for GST registration: -
• PAN card
• Aadhaar card
• Photograph
• Proof of address
• Bank account details
Documents for PAN card: -
• Aadhaar card
• Photograph
• Sample of signature
Documents for establishment registration: -
• Utility bill of the firm
• Aadhaar card
• Voter ID card
• PAN card
• Photograph
• Details of business
Fee
To be updated.
The timeline for the sole proprietorship deepens from state to state, generally, the complete process of registration takes 1 to 2 weeks.
Process of establishing sole proprietorship is easy and simple, hence it takes up to 15 days to set up sole proprietorship business in India.
Yes, there is requirement of other registrations such as GST registration and it is also mandatory to register under Shops and Establishment Act.
There is no such requirement, you can start business with minimum capital often we see the requirement of capital depends on the nature of business.
.jpg)
