Sole Proprietorship is the simplest business form that can adapt by anyone without interfering with stringent compliances. It is perhaps the most convenient form of business that defies any connection with the specified law. Unlike mainstream business forms, Sole Proprietorship could be set up with minimal paperwork and process. Let’s move forward how you can Register Sole Proprietorship Business in India.
Documents to Register Sole Proprietorship Business
Although the sole proprietor doesn’t have to opt for governmental registration, he has to arrange a few registrations to ensure the smooth functioning of the business.
- Aadhar Card
- SME registration
- PAN Card
- Detail of bank Account
- Proof regarding the business premises.
- GST Registration
- Shop and Establishment Act License
Aadhar number is mandatory for all business registration in India. Also, the person needs to link the PAN card with the Aadhar number to ensure the successful filing of ITR. In case if you don’t have your Aaddhar number at your possession, make sure to avail it via AadharSeva Kendra or E-Mitra. Once you applied for the Aadhaar card, the copy of the same will be routed to the registered address within two to three weeks
PAN Card
Please note that the filing of ITR is practically impossible in the absence of a PAN card. Henceforth, apply for PAN card ASAP if you haven’t grabbed it yet. You can use the online portal for the registration of the PAN card, and it would cost you around Rs. 110, approximately. While addressing the registration formalities online, you have to upload the scanned copy of mandatory documents regarding identity and address proof and recent photographs.
It would take around one week for the authority i:e NSDL to verify the PAN card application. Once the authority finds it legitimate on all grounds, the PAN number would be allotted to the applicant. After two weeks or so, the hard copy of the same would be router to the registered address.
Bank Account
After acquiring PAN and Aadhar number, you can approach any bank to open an account. While doing so, you need to carry your address and identification proof along with the PAN and Aadhar number. In addition to that, you would also need to furnish GST registration document to serve this purpose.
Registered office proof
- In the case of rented property, make sure to provide NOC from a landlord or Rent agreement.
- In case if you are the owner of the property, make sure to furnish utility bill displaying the address of your premises. Furthermore, the applicant has to provide some supplementary documents to establish the business.
Registering as SME
Small and Medium Enterprise (SME) registration is vital for a sole proprietorship business, but it isn’t compulsory. To avail such a registration, head over to the online portal and file the relevant application. (SME) registration comes really handy when it comes to availing credit from the financial institutions. Even the government supports SMEs to a significant extent by providing them access to easy loans that attract a fewer interest rate.
Shop and Establishment Act License
Shop and Establishment Act License is basic registration that everyone should avail before commencing any business activities. The local law governs this license and the Municipal corporations of respective states furnish it. The nature of the business and number of employees are two dominating criteria for the issuance of the Shop and Establishment Act License.
GST Registration
If you are generating yearly revenue above the threshold limit i.e.Rs. 20 lakhs, you can opt for GST registration. Apart from that, the GST registration is also compulsory for e-commerce operators. GST registration seeks following documentation.
- Proprietor’s PAN and Aadhaar Card.
- Utility bill such as Electricity bill/ rent agreement for the proof of business place.
- Bank account detail such as IFSC code, account number, and address of the premises). Note: this all mention on the passbook of your existent bank account
For GST registration, the applicant can hover to the GST portal and fill the applicant. The authority normally takes around 3-4days to process the request. After availing of the GST number, you are all set to commence your business operates under the sole proprietorship business model.
Read our article:Conversion of Sole Proprietorship Firm into Private Company
Sole proprietorship: Notable pointers
- Sole proprietors are personally accountable for managing debts of a sole proprietorship business. This sole proprietor, have full control over the business.
- A sole proprietorship is a business form that is quite popular among the upcoming entrepreneur due to its easy setup and simplicity of operation.
- The sole proprietorship, unlike other business forms, cannot be deemed as a legal entity.
- The proprietors who avail Shop and Establishment Act License cannot pursue the unethical business practice. If he/she fails to maintain harmony with compliances, the authority could force them to pay the penalty.
- PAN reflects all your transaction regarding ITR and tax liabilities. Until and unless a person linked the Aadhaar card with PAN, the filing of ITR would not be successful.
- A sole proprietors need to abide by the local laws or else they have to confront some penalty.
- According to the tax authority, the owner and the business would be treated as a single entity on the taxation front under the Sole proprietorship business model.
- The sole proprietor is solely responsible for addressing the business risks.
Conclusion
A sole proprietorship is not deemed as a legal entity which inherently makes its conducive option for business. With unlimited liabilities and control at disposal, a sole proprietor can rejoice the full profit and minimize tax liabilities. Kindly hover to the CorpBiz helpdesk in case if you want to strengthen your business presence or want to Register Sole Proprietorship Business in your respective locality.
Read our article:An Ultimate Guide to Registration of a Sole Proprietorship Firm in India
