Sole Proprietorship

Sole Proprietorship Registration in India

Sole Proprietorship is a business managed by a single person that is “one-man organization where a single individual owns, manages and controls the business.” It is not mandatory to work ‘alone’ if you are in sole proprietorship—it is possible for the sole proprietor to hire other people for help in work. Only appropriate or proper licensing to conduct a business and registration of business name if it differs from the sole proprietorship is required.It does not require a registration as such. There is no government registration needed in order to start a sole proprietorship business in India. You don't have to go to an online registration portal and fill up a form or submit any documents. One of the primary benefits is ease of formation, since a government registration is not required. There are no fees to be paid for starting a one-man business on your own, and there is no government regulatory paperwork and compliance to be fulfilled. There are no minimum capital investment requirements, and the proprietor has full control and ownership stake.

However, you do need to open a current account with a bank in the name of the business. A current account in turn requires that you have a specified location from which you are doing business. The bank will ask you to submit at least two documents as proof of business location in the form of government registrations such as shop act license, service tax, GST, etc. A sole proprietorship, also known as the sole trader or simply a proprietorship, is a type of business entity that is owned and run by one individual and in which there is no legal distinction between the owner and the business. Sole Proprietorship examples include small businesses, such as a single person art studio, a local grocery, or an IT consultation service. The moment you start offering goods and services to others, you form a Sole Proprietorship. It's that simple. Any person who wants to start a business with less investment can opt for this type of business form.A sole proprietorship is the most common form of a business entity where one person is the owner and is personally liable for all the debts and liabilities of the business. It is the simplest form of an entity with minimal compliance procedures.

Once you begin conducting business on your own, you're a sole proprietorship. There is little in the way of paperwork or bureaucracy to contend with, and you don't have to report to anyone. But if you decide to expand your company, or want the legal and financial protection not offered by the sole proprietorship model, you need to incorporate your small business. Incorporating may also make it easier to attract potential investors, should you choose to do so.You get to keep whatever profit or income you generate. Furthermore, the tax benefits of sole proprietorship prevent double taxation of the firm. You will file returns and pay taxes only in your personal name. There are no separate income tax returns to be filed and no tax to be paid by the firm.

There are only two things you need to do for starting a sole proprietorship business in India.

1.Choose a business name.

2.Select a location as the place of doing business

First step starts with just opening a current account to ensure safe payments in the proprietorship’s name. Hence, generating a current account is considered to be the groundwork for starting this type of business.