Sole Proprietorship concern is an entity which can be started by an individual who is a citizen of India holding a valid PAN. It is a business ownership structure for individuals who want to work, manage, control and direct the organisation independently. Sole Proprietorship registration does not require any separate formalities and hence can be formed quickly and easily. The proprietorship firm registration is predominantly used by micro and small businesses operating in the unorganised sectors.
This form of business entity registration enables quick and easy business decision making because a single person makes all the decisions. The Income tax charged on the profit of proprietorship firm is as per Individual tax rate since the proprietorship concern and the individual are considered as one as per Income tax. Notably, the proprietor is himself liable for all the liabilities of the business. Registration of proprietorship firm is suitable for unorganised and small businesses. Proprietorship is beneficial to a certain level of profits if you are expecting profits or income beyond that limit you can opt for LLP or Private Limited Company Registrations.
The Government of India has not laid down specific laws governing formation of sole proprietorships. As a result, with sole proprietorship registrations, there are minimal legal compliances that you will have to follow. The extent of compliance could be limited to the filling of GST and Income Tax returns.
The sole proprietorship registration can be completed easily due to hassle-free and lesser legal compliances when compared to other corporate entity forms viz Company or an LLP. With a minimum document requirement, the registration can be completed as soon as 15 days.
Since a single person runs the business, decisions can be taken quickly without the involvement of any other individuals. These ease of taking decisions is preferred by new businesses as it allows them to grow quickly.
Since the proprietor and the Sole Proprietorship firm are one and the same, the taxes charged on the proprietorship firm are as per Individual Tax rate slab.
To register a sole proprietorship, a registration needs to be ascertained viz GST, MSME, etc.
Applicable documents for the registration to be filled, check specific registration for details.
In case there are departmental queries on the filled registration, the same are responded appropriately.
Once the Registration is approved, the Certificate can then be downloaded from the website
Proprietorship business can be started by any Indian citizen holding a valid PAN card.
Government of India has no rules and regulations for sole proprietorship registration. You will need a PAN card, one ID proof, and utility bills in the name of the owner.
As per RBI guidelines, to open a current bank account, the bank will require at least two forms of registration which could be GST registration, MSME registration, Shops & Establishments Act Registration.
One person is required to start a sole proprietorship.
The owner is personally liable for the business. It will not be a separate legal entity and the assets as well as liabilities of the proprietor and the proprietorship will be the same.
This entirely based upon the type of registration, for example, GST is state-specific; however, PAN is allotted once to an individual.
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