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How To Register A Sole Proprietorship Firm

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An Overview

Sole Proprietorship Firm Registration

When a business is owned by one person, it is a sole proprietorship firm. It is the simplest form under which a company can operate. This business does not have any separate identity under the law. It can also be operated under the name of its proprietor. When a business is owned and governed by one person, it is called a sole proprietorship company. This type of business can be incorporated in fifteen days and hence makes it one of the most popular types of business to begin in the unsystematic sector, specifically among merchants and small traders. For a Sole Proprietorship business,

registration is not required as it is identified through alternate registrations, such as GST registrations. However, its liability is unlimited and it also doesn’t have perpetual existence.

Registration is not necessary since alternative registrations, e.g. GST registrations, have identified them. However, its liability is unlimited and it does not exist forever.

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Sole Proprietorship Firm

Benefits

  • Compliance minimum
  • Comparatively Economical
Sole Proprietorship Firm

Documents Required

  • Address and identity proof
  • PAN card, KYC documents
  • Rental agreement or sale deed (in case of Shops & Establishment Act Registration).
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    Frequently Asked Questions

    Who can begin a sole owner's business?

    Every Indian citizen with a current account can enter a sole property in the name of his or her business. Depending on the type of business to be established, registration may or may not be required. However, banks typically need a Shop & Establishment Registration if they are to open a current account.

    How much time is it necessary for Sole Proprietorship to establish a business?

    It does not take more than 15 days for a sole proprietorship business to set up and run. Small traders and merchants have made this simple approach popular. Of course, it’s a lot cheaper, too. This is also why the company structure is the most widely used.

    Which companies are often managed as sole ownerships?

    Most local companies are run by smaller traders and manufacturers as sole owners, from grocery stores to fast-food suppliers. That doesn’t mean that larger companies can’t function as sole owners. Jewelry shops are sole owners, but not advisable.

    Is there no other registration required except for a current account?

    It depends on the company in which you are. Any company whose sales over Rs 20 lakhs (Rs 10 lakhs for the North Eastern states) in a financial year is compulsory to obtain GST records. It is compulsory to register in accordance with the law on shops and establishments for companies that are involved in selling goods or services to customers from a commercial establishment

    Is running a private limited company less expensive than running an LLP?

    Yes, running an LLP is considerably cheaper than running a limited private company. Especially because compliance, for example, with an audit, is only significant for LLPs after their turnover. In their first year, most LLPs spend around half as many on registrations and compliance work as private limited companies.

    Checklist
    • A certificate or license issued by municipal authorities in accordance with the Shop and Establishment Act.
    • The Certificate of Practice, which is issued by the Institute of Chartered Accountants of India, is a license issued by registering authorities.
    • The Central Government or a State Government Authority/Department, for example, issues the registration/licensing document in the name of the proprietary concern.
    • Banks may also accept the IEC (Importer Exporter Code) issued to a proprietary concern by the DGFT office as an identity document for the opening of a bank account, among other things.
    • Complete an income tax return (not just the acknowledgement) in the sole proprietor’s name where the firm’s income is taxable.is reflected
    • The income tax authorities duly authenticated and recognised,
    • The utility bills for electricity, water and the landline telephone bills are issued on behalf of the proprietary enterprise.