Sole Proprietorship Firm
One of the most common practices of registering a business in India is a sole proprietorship firm. A sole proprietorship is a form of business that is owned by a single person. Any entrepreneur, who wants to start solo, opts for a sole proprietorship business format. It’s a single person firm registration business structure.
This business structure is run and owned by a single person and there is no involvement of any other party whether individual or an entity in the management until and unless the proprietor himself wants to involve in a team. Generally, all the elements of the business are controlled by the owner only i.e. the proprietor, he himself will be accountable for all the finances, ledgers, accounts, and legal documents also including any debts, loans or losses, etc. of the sole proprietorship firm.
The proprietor is not only solely liable for the losses but is also entitled to all the benefits of the sole proprietorship business along with the risk factors. All the assets and liabilities of the sole proprietorship business also belong to the single owner i.e. proprietor. The proprietor can use a business or trade name other than his own name also on which he can run the business and this is also termed as the legal name for the sole proprietorship firm registration.
Advantages of Sole Proprietorship Registration
- Only one person is involved
- Fast and easy business decision making
- Minimum compliances required
- Less amount of investment required
- The owner has sole 100% control over the business
- No corporate taxes applicable
Documents required for registration of a sole proprietorship business
- Pan card
- Aadhar card
- Bank account details along with a cancelled cheque or bank statement
- Mobile Number, Email id and Passport size photograph
- Registered office address proof (electricity bill)
In order to run the business successfully, there are certain registrations which a sole proprietor should also obtain, which are enumerated as below:
- CA certificate (Stamped by a chartered accountant)
- Udyog Aadhar registration
- Shop & Establishment registration ( If applicable )
- TAN registration
- GST Registration
Procedure for Registering a Sole Proprietorship Firm Online in India
- PAN application has to be filed (if owner has Pan then no need to apply).
- Deciding the name of the business.
- Opening a bank account in the name of the business (Current account).
- Registering the business as Small and Medium Enterprise (SME) under Micro, Small and Medium enterprises Act.
- Registration under Shop and Establishment Act as and when required.
- Registration under GST Act.
- Registration of TAN of the sole proprietorship business.
Some FAQs related to sole proprietorship business for more clarification
Q1. How much capital is minimum required to start a sole proprietorship business?
A sole proprietorship business can be started with any amount of capital, it totally depends upon the proprietor that what amount he wants to invest in the business at the time of business registration.
Q2.Who is entitled to be a proprietor in the Indian proprietorship businesses?
Any individual can be a proprietor in the Indian proprietorship business, but he must be an Indian citizen and a resident of India and Non-resident Indians can only invest in proprietorship business with the prior approval from Government of India.
Q3. Is a proprietorship acknowledged as a separate legal entity in the eyes of law?
In sole proprietorship compliances business, the PAN card of the proprietor is used as the PAN card of the proprietorship business, so the firm cannot be a separate legal entity from its owner. All the assets and liabilities of a sole proprietorship business are the assets and liabilities of the owner i.e. proprietor.
Q4. Can a proprietorship business be transferred?
A sole proprietorship business cannot be transferred to any other person or an entity, like a Private limited or a Public Limited company or a Limited Liability Partnership. However, the assets of the sole proprietorship business can be transferred from him to another person by way of selling the same, it also comes with a drawback that certain government approvals and registrations which are in the name of the sole proprietorship business cannot be transferred to the other person or an entity as they are in the name of the proprietor himself and his sole business.
Q5. What details are required to open a current account of the sole proprietorship business?
For the business a proprietor uses his own PAN card and address proof for opening a current account, however in certain banks GST certificate is also required for current account opening.
For registration of proprietorship firm, one can contact to Neusource as our services are available to all parts of India. Neusource dealt in online business registration and providing suitable license which is required to carry the business legally. A person directly connects with Neusource via online portal for registration of Sole Proprietorship Firm.