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What is Sole Proprietorship Registration?
When single person runs a business then such kind of business is called as proprietary business, and the owner of the business is called as proprietor. Proprietorship is the most common form of the business which is used in India. You can start and operate the business with minimum regulatory compliance. However there is no full fledged way available to register your proprietorship by Indian Government. Tax registration and other business registration’s is the right way to show existence of your proprietary business. Following registrations can be used to show the existence of your proprietory Business
- Professional Tax Registration.
- GST Registration.
- Shop and Establishment Registration.
The owner of a sole proprietorship business typically signs contracts in his or her own name, because the sole proprietorship business has no separate identity under the law. The sole proprietor owner will typically have customers write checks in the owner's name, even if the business uses a fictitious name. Sole proprietor owners can, and often do, mix personal and business property and funds, something that partnerships, LLCs and corporations cannot do. Sole proprietorships often have their bank accounts in the name of the owner. Sole proprietors need not observe formalities such as voting and meetings associated with the more complex business forms. Sole proprietorships can bring lawsuits (and can be sued) using the name of the sole proprietor owner.
How to Register a proprietorship company in india?
Following are the steps to register a proprietorship company in india
Fill up a simple form on our website providing basic information about proprietor and business.
Provide relevant documents online and we will file them with relevant authorities.
We will get your proprietorship registered.
Documents Required for Sole Proprietorship Firm Registration
For State and Central license
|PAN card of Proprietor||Aadhar Card of Proprietor||Electricity or Water bill of business place|
Entity Comparison Guide
|Members||Maximum 1||2-200||2-20||2- Unlimited||1|
|Legal Status of Entity||Not Considered as separate Legal entity||Considered as separate Legal entity||Not Considered as separate Legal entity||Considered as separate Legal entity||Considered as separate Legal entity|
|Members Liability||Unlimited Liability||Limited to the extent of share capital||Unlimited Liability||Liability of its members is limited||Limited to the extent of share capital|
|Registration||Not Compulsory||Registered Under MCA||Optional/ Can be Registered under partnership Act 1932||Registered Under MCA||Registered Under MCA and Companies Act 2013|
|Transferability Option||Not Allowed||Can Be Transferred||Not Allowed||Can Be Transferred||Allowed to only one person|
|Taxation||As in Individual||30% of Profit Plus CESS and Surcharges applicable||30% of Company Profit||30% of Profit Plus CESS and Surcharges applicable||30% of Profit Plus CESS and Surcharges applicable|
|Annual Filings||Income Tax Returns with the Registrar of companies||Filed with the registrar of the company||Income Tax Returns with the Registrar of companies||Filed with the registrar of the company||Filed with the registrar of the company|
Advantages of Sole Proprietorship Registration
- Easy To Start and Close Business:
One a week’s time you can start your business saving your time and money.
- Single Ownership:
Single ownership means less complications, also decision making is limited to one person.
- No Restriction For Business Name:
There is no need to register or reserve the name for proprietorship purpose, you can directly start the business on any name of your choice.
- Easy Closure:
Closure procedure is very simple with minimum formalities.
Compliances Required for Sole Proprietorship Firm
Sole Proprietorship has minimal compliances as it is not a separate legal entity from a proprietor. Main compliances are tax related and annual compliances.
Following are the compliances a sole proprietorship india needs to follow:
1. Sales Tax (VAT) Returns:
These are to be filed in every quarter of the assessment financial year, on the following prescribed dates
- For April to June - July 25
- For July to September - October 25
- For October to December - January 25
- For January to March - April 25
2. Service Tax Returns:
These are filed on half yearly basis, on the following due dates of the assessment financial year
- For April to September - October 25
- For October to March - April 25
3. Income Tax Returns:
ITR is filed on yearly basis, on the following dates depending upon the necessity of financial/tax audit
- When audit is not necessary under any law - July 31 of the assessment financial year
- When audit is compulsory under any law --- September 30 of the assessment financial year. This gets applied when the annual turnover of the proprietorship firm is over INR One Crore; Or the Service Turnover is more than INR 25 Lac.