BASIC PLAN
SOLE PROPRIETORSHIP MEANING:
o Sole Proprietorship is a form of business which is managed by a single person.
o A single person who wants to start a business from home or on a premise with a minimum amount can opt for this form of business.
o The investment for the sole proprietorship business will be done by the single proprietor.
o The entrepreneur exercises his activity without having created a distinct legal person.
o The different forms of sole Proprietorships are : Local businesses such as grocery stores, parlours, boutiques, retail stores, etc.
STANDARD PLAN
- Sole Proprietorship Registration under Shop and Establishment Act.
- GST Registration.
Rs 3,999/-
PREMIUM PLAN
- Sole Proprietorship Registration under Shop and Establishment Act.
- GST Registration.
- MSME Registration.
Rs 4,499/-
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SOLE PROPRIETORSHIP REGISTRATION INDIA
SOLE PROPRIETORSHIP MEANING:
- Sole Proprietorship is a form of business where a business is managed by a single person. Generally, it does not require any registration as such. Any individual who wants to start a business with less investment can choose this type of business form.
- The control of the business is solely in the hands of the single proprietor/owner.
- A single person who wants to start a business from home or on a premise with a minimum amount can opt for this form of business.
- The investment for the sole proprietorship business will be done by the single proprietor. He bears all the losses of the business and enjoys all the profits. He controls the business as well as manages it. He can appoint persons for conducting the business, but the ownership will rest solely with him.
- Many local businesses such as grocery stores, parlours, boutiques, retail stores, etc., can be established as a sole proprietorship firm. Even small traders and manufacturers can establish a sole proprietorship firm.
- ADVANTAGES OF SOLE PROPRIETORSHIP:
- Less compliances:
- The sole proprietorship business can be started easily by just one person. There is minimum compliance that is required to be adhered to get it incorporated. This form of business is economical as it is relatively less expensive to start than a company or LLP.
- Control of the Business:
- The sole proprietor will have complete control over the business. He will look after all the aspects of the business. Since only one person is running the business, secrecy can be maintained.
- Quick decision making:
- The sole proprietor takes all decisions of the business. Thus, the decisions can be taken quickly and immediately without the need for consulting anyone.
- DISADVANTAGES OF SOLE PROPRIETORSHIP:
- Unlimited Liability:
- There is an unlimited liability on the sole proprietor. He is personally liable for all the transactions he enters in the business. If any loss occurs, he will have to bear the whole loss out of his personal estate.
- No perpetual succession:
- There is no perpetual succession which means it can come to an end if something happens to the sole person taking care of the business. It can shut down at any time. This makes the business unreliable and difficult to gain public trust for entering into agreements or contracts to expand the business.
- Difficult to raise funds:
- Since a single person manages the business, it is not easy to raise capital. The capital of the business is from the investments put in by the sole proprietor. The sole proprietorship firm has no separate legal entity status from the owner. As it can come to an end at any time and there is no separate entity, it is difficult to obtain funds from third parties.
SOLE PROPRIETORSHIP REGISTRATION
- Applying for PAN card.
- After obtaining a PAN card, or if the proprietor already has a PAN card, the next step is to keep a name for the sole proprietorship business.
- The next step is to open a bank account in the name of the business. All the transactions of the business will be through this bank account.
- Though no specific registration is required for starting a sole proprietorship firm. Certain basic registrations which are required to be obtained by a sole proprietorship firm are:
- The proprietor needs to obtain the Registration Certificate under the Shops and Establishment Act of the state in which the business is located.
- The proprietor should also register for GST, if the business turnover exceeds Rs.20 lakh.
- The proprietor can also register as a Small and Medium Enterprise (SME) under MSME Act. But it is not compulsory, however, it is beneficial towards being registered under the same.
- Aadhaar Card.
- PAN Card.
- Registered Office proof.
- Bank Account.
- PAN Card of the proprietor.
- Name and address of the business.
- Bank Account in the name of the business.
- Registration under the Shop and Establishment Act of the respective state.
- Registration under GST, if the business turnover exceeds Rs.20 lakhs.
FREQUENTLY ASKED QUESTION - FAQ.
Who can form a Sole Proprietorship Firm?
- An Indian National with a current bank account on a business name is eligible for forming a sole proprietorship Firm.
- Generally, banks ask a customer for a Shops and Establishments license prior to opening a current bank account.
What kind of liabilities does a Sole Proprietor have ?
- A Sole Proprietor has unlimited liability towards the business as a Sole Proprietorship is not a separate legal entity.
- He is personally liable for all the transactions he enters in the business. If any loss occurs, he will have to bear the whole loss out of his personal estate.
What type of Business is Sole Proprietorship suitable for ?
A Sole Proprietorship Firm is most suited for unorganized sectors with preference given by small and micro businesses such as grocery vendors, fast food vendors, etc.
What are the advantages of Sole Proprietorship ?
The key advantages of a Sole Proprietorship firm are less compliance, ease of start, less Tax and less costing.
Does Sole Proprietorship firm have any mandatory registration requirements ?
No. A Sole Proprietorship firm does not have any government-mandatory registration requirements. The registration of this type of business entity is usually obtained by the acquisition of registration related to tax under the business name.
Is it possible to convert a Sole Proprietorship firm to any other business Form ?
Yes. A Sole Proprietorship firm can be converted to a Partnership or Limited Liability Partnership as per due procedure at a later stage.
How income is treated for a Sole Proprietorship firm ?
As per tax laws, the income from a Sole Proprietorship firm is treated as the personal income of the sole proprietor, as a sole proprietorship is not a separate legal entity.
Is audit required for a Proprietorship Firm ?
It is not necessary to prepare audited financial statements each year. However, a tax audit may be required based on turnover and other criteria.
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