Sole Proprietorship Registration
Share holders/Directors Details
- Pan card
- Aadhar card
- Passport or Voter ID or Valid Driving License
- Recent Bank statements (not older than 1 month)
- Mobile number & email id
- passport size photo
Company Details
- Electricity bill or Telephone bill or gas bill of your office address (not older than 1 month)
- Property owner – Name & Address (to draft rental agreement)
- Two Proposed company names (To apply for name reservation)
- Deliverables
Deliverables
- Digital signature for 2 directors
- MoA & AoA preparation
- PAN & TAN for the company
- DIN for 2 directors
- Incorporation certificate
- Name reservation fees
- Current Account Opening Support
Sole Proprietorship Registration Process - Overview
Sole proprietorship is a widely chosen business structure in India, particularly favored by small businessmen, sole retailers, and traders due to its simplicity and direct control by the owner.
Definition and Benefits: A sole proprietorship is an individually owned and managed business entity where the owner retains complete decision-making authority without external influence. It does not involve shareholding or joint arrangements, making it straightforward and easy to manage. While registration is not mandatory, it offers significant advantages in terms of legal status and tax exemptions.
Who is a Sole Proprietor? A sole proprietor is the sole owner of the business, exercising full control over its operations. Unlike corporations or partnerships, a sole proprietorship is not considered a separate legal entity from its owner.
Advantages: Sole proprietors appreciate the simplicity of their business structure, with fewer legal formalities and lower costs compared to other business types. It allows for quick decision-making and direct control over business operations. Taxation is straightforward, as the proprietor’s income is taxed directly without separate entity taxation.
Eligibility and Formation: Any individual, small trader, or entrepreneur with limited capital can establish a sole proprietorship. This form of business is ideal for those starting out and looking to operate independently with minimal regulatory requirements.
Registration Requirements: While there’s no specific law governing sole proprietorships, voluntary registration under various acts can provide benefits:
- Registration under GST if annual turnover exceeds ₹20 lakhs.
- Obtaining Udyog Aadhar under the MSME Act.
- Registration under the Shops and Establishment Act of the respective state.
Compliance and Documentation: Compliance requirements for sole proprietorships are minimal compared to larger entities like companies. Basic filings include:
- Annual income tax return filing.
- GST return filing if applicable.
- TDS deduction and return filing as per Income Tax rules.
To register a sole proprietorship:
- Obtain a registration certificate under the Shops and Establishment Act.
- Apply for GST registration if turnover criteria are met.
- Ensure compliance with state-specific regulations for business operations.
Documentation Checklist: Before registering, ensure you have:
- PAN Card of the proprietor.
- Business name and address details.
- Bank account in the business name.
- Proof of registered office (rent agreement, NOC from landlord, or property ownership documents).
Establishing a sole proprietorship offers flexibility, minimal compliance burden, and direct control, making it a preferred choice for many starting their entrepreneurial journey in India.
Forming a Private Limited Company in Bangalore presents strategic advantages and opportunities for growth. By following these outlined steps and ensuring adherence to legal requirements, entrepreneurs can establish a robust and credible business entity. Bangalore’s dynamic business environment, combined with the benefits of a Private Limited Company, provides a solid foundation for long-term success.
About the Author
This guide is authored by experts from TrueConnect, specializing in Virtual CFO services and company formation consultancy. With a commitment to providing authoritative and trustworthy guidance, TrueConnect is your dependable partner in navigating the complexities of business formation in India.
FAQs
The registration fees for a shop act license or Gumasta license vary based on the state and number of employees. There are no charges for GST registration under the act.
For GST registration, the following documents are required:
- Photo of the promoter or owner
- Email address and PAN card
- Legal ownership document if the place of business is owned by the proprietor, or Rental Agreement in other cases
- Electricity bill
- Property tax receipt
- Aadhar card and bank statement
To get GST registration:
- Generate a Temporary Reference Number (TRN).
- Complete the registration application after the specified time gap provided with TRN.
- Fill out the application with details about the business, proprietor, place of business, HSN code for goods and services, Aadhar Verification, etc.
- The application undergoes Aadhar authentication.
- Receive the Application Reference Number (ARN) indicating that your details have been submitted for verification by the tax authority.
- Once approved, credentials will be emailed, and the proprietor can download the GST certificate.
Since registration for sole proprietorship is not mandatory, there are no specific forms dedicated to sole proprietorship registration.
Advantages include minimal compliance requirements, ease of business startup, cost-efficiency, complete control over operations, and ease of business closure.
