Sole Proprietorship Registration

Overview of the Sole Proprietorship Registration procedure in India:

A Sole Proprietorship is generally a trader and small merchant business. It is not mandatory to register such companies as they are governed by different laws issued by the government, like GST regulations. It has no separate existence other than its owner’s. The owner bears all the liability in the case of loss or debt of his business. There’s an unlimited liability that the owner has to bear all alone. There are various sole proprietorship businesses all across the country. This is because it is an easy task to start such a business.

Advantages of registering a Sole Proprietorship:

Only one individual is the business owner, member, shareholder, or investor. The business structure also has some advantages. They are as follows:-

• Complete Ownership: The ownership of the business and all its assets are in the hands of one individual. He has the absolute right to transfer this ownership to anyone he wishes, with a will as a tool.
• No need to share profit or loss: The owner of a Sole Proprietorship enjoys all the profit generated from the sales while bearing all the losses and debt.
• Complete Control: There’s only one individual involved. Therefore, he has the power and control over all the activities and operations in a sole proprietorship business. He neither has to follow anyone’s orders nor report to someone. However, this also means he needs the dedication, hard work, skills and expertise to perform all business activities alone.
• Single Person’s Investment: The owner makes an investment in such a business. Yes, he might use sources to generate investments, like loans from financial institutions.
• Fewer Rules and Regulations: There are not many rules, regulations or formalities associated with sole proprietorship, irrespective of getting registered or staying non-registered.

What are the documents required when registering your Sole Proprietorship?

The registration process of Sole Proprietorship also requires a few documents; these are as follows:-

• Aadhar Card of the owner of the business
• PAN Card of the owner of the business
• A bank account in the name of the business
• Other identity proof such as voter id, driving license etc.
• Address proof of the owner and the business in the form of utility bills such as electricity, telephone, gas, water, etc.
• A current bank account in the name of the sole proprietorship for the GST registration
• In the case of a rented property, a NOC and rental agreement from the landlord is required.

Step by Step guide to the Sole Proprietorship Registration Process:

There are multiple ways to register a Sole Proprietorship Business, and Eazy Startups covers them all:-

• GST Registration Process
• SME Registration Process
• Registration under the rules and regulations of that particular state as per the Shop and Establishment Act

GST Registration Process:

GST stands for Goods and Service Tax and is a mandatory registration procedure that every business has to go through. Even E-commerce and online businesses are liable for GST Registration. These are the documents for GST Registration:-

• Aadhar Card and PAN Card of the owner
• Passport-size photographs of the owner
• Office Address Proof
• A copy of the Bank Statement with the following details visible – Branch Address, Bank Account Number and IFSC Code

SME Registration Process:

Registering your sole proprietorship as an SME (Small and Medium Business) is mandatory per the MSME Act. It also has many benefits associated with it, like – getting loans at low-interest rates and benefiting from government-introduced schemes for the welfare of SME Businesses. This process is straightforward as it can be done by registering online.

Registration under the rules and regulations of that particular state as per the Shop and Establishment Act:

Municipal parties issue this after informing the number of employees in the firm.

Frequently Asked Questions