One Person. Easy To Manage.
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What is meant by a Sole Proprietorship?
A proprietorship is a kind of an unregistered business entity which is owned, managed and controlled by only one person. The sole proprietorship business is the most commonly found business in India and is operated by the majority of the micro and small businesses present in the unorganised sector of the economy.
Sole proprietorship businesses are simple to commence and have the least amount of regulatory compliance requirements for its working. This business works the best for solitary entrepreneurs who are stepping into the business world for the first time and prefer to deal with only small businesses with a limited number of clients.
Who Is A Sole Proprietor?
A sole proprietor is the owner of the given business. They (he or she) can not be a corporate or legal entity since that cancels the purpose of the category. A sole proprietor and their proprietorship are considered to be the same legal entity, which is why the actions of the owner and the business are tied to each other. This means that the owner can be sued for the discrepancies and misconduct of the business, and can also sue on behalf of the business. To put it simply, a sole proprietor is a business, and the entity perishes with the sole proprietor. Unlike other registered companies such as Private and Public Limited companies, a sole proprietorship does not enjoy the concept of perpetuity and going concern due to the entanglement of having no separate legal persona.
The PAN and other documents of the proprietor are utilized to obtain the business registrations and licenses for the sole proprietorship. If there are any issues of liability within the business, the proprietor is held accountable for it, which means that his personal assets can be used to pay off debts and insolvency.
Due to its disadvantages, this registration of a sole proprietorship will be appropriate only for small businesses in the unorganised sector with a limited time of business.
Key Registrations In Sole Proprietorship
Each proprietorship differs in terms of the functions, clientele and the mode of operations. Hence, a couple of the registrations mentioned below will be applicable.
MSME Registration
MSME or Udyog Aadhaar registration can be attained by a sole proprietor in the name of the business to establish that the sole proprietorship is registered with the Ministry of Micro, Small and Medium Enterprises.
TAN Registration
TAN registration has to be mandatorily attained by the sole proprietor from the Income Tax Department on occasion of the proprietor making salary payments where a TDS deduction is required.
GST Registration
GST registration can be pursued if the sole proprietor sells goods or renders services that cross the GST turnover threshold limit for the purpose of registration. In most of the Indian states, GST registration is mandatory for service providers who make annual revenue of amounts more than Rupees 20 Lakh. Additionally, in the case of traders, the annual revenue of amounts more than Rupees 40 Lakh will invite registration.
Address proof required example rent agreement and electricity bill.
Import Export Code
Import Export Code or IE code can be granted by the DGFT in the name of the proprietorship, is the proprietorship is undertaking the business of export and/or import of goods into India.
FSSAI Registration
If the sole proprietorship is involved in selling edible food products or handling food products, FSSAI registration has to be compulsorily acquired from the Food Safety and Standard Authority of India in the name of the sole proprietor.
Current Account
A current account can be opened in the name of a sole proprietorship through our website in various banks in India.
We offer all the services above so that you can focus on your business while we take care of the paperwork and compliance matters for you.
