{"id":51660,"date":"2023-01-07T12:09:03","date_gmt":"2023-01-07T06:39:03","guid":{"rendered":"https:\/\/corpbiz.io\/learning\/?p=51660"},"modified":"2023-04-11T11:34:19","modified_gmt":"2023-04-11T06:04:19","slug":"process-of-registering-a-sole-proprietorship-in-india","status":"publish","type":"post","link":"https:\/\/corpbiz.io\/learning\/process-of-registering-a-sole-proprietorship-in-india\/","title":{"rendered":"What is the Process of Registering a Sole Proprietorship in India?"},"content":{"rendered":"\n<p>A proprietorship is known as a state of owning a business or holding\nproperty to earn profits. It has been generally seen that the term\nproprietorship and sole proprietorship have simultaneous usage. The sole\nproprietor carries the business exclusively by and for himself. He takes\ncontrol of all the activities of the business. He is the sole responsible for\nall the losses and the profits. Therefore a sole proprietorship can operate\nunder the name of its owner. In this article, we will the process of registering\na <strong><a class=\"text-primary\" href=\"https:\/\/corpbiz.io\/sole-proprietorship-registration\">Sole Proprietorship in India<\/a><\/strong>.<\/p>\n\n\n\n<p>It is very easy to start a business as a sole proprietor, defiantly it\nhas a lot of benefits, but the decision should be taken only after considering\nthe circumstances, such as the availability of financial resources after and\nbefore the investment, protection of personal assets and all the tax-related\nsituation.&nbsp; <\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title ez-toc-toggle\" style=\"cursor:pointer\">Page Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 eztoc-toggle-hide-by-default' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/corpbiz.io\/learning\/process-of-registering-a-sole-proprietorship-in-india\/#What_are_the_Primary_Features_of_a_Sole_Proprietorship_in_India\" >What are the Primary\nFeatures of a Sole Proprietorship in India?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/corpbiz.io\/learning\/process-of-registering-a-sole-proprietorship-in-india\/#What_Are_The_Demerits_Of_A_Sole_Proprietorship\" >What Are The Demerits Of A Sole\nProprietorship?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/corpbiz.io\/learning\/process-of-registering-a-sole-proprietorship-in-india\/#List_of_Documents_Required_For_Registering_A_Sole_Proprietorship\" >List of Documents Required For Registering A Sole\nProprietorship<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/corpbiz.io\/learning\/process-of-registering-a-sole-proprietorship-in-india\/#Steps_Involved_In_the_Process_for_Registering_a_Sole_Proprietorship\" >Steps Involved In the Process for Registering a Sole Proprietorship<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/corpbiz.io\/learning\/process-of-registering-a-sole-proprietorship-in-india\/#Compliance_for_Proprietorship_%E2%80%93_Registering_a_Sole_Proprietorship\" >Compliance for Proprietorship &#8211; Registering\na Sole Proprietorship<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/corpbiz.io\/learning\/process-of-registering-a-sole-proprietorship-in-india\/#Conclusion\" >Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_are_the_Primary_Features_of_a_Sole_Proprietorship_in_India\"><\/span>What are the Primary\nFeatures of a Sole Proprietorship in India? <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong>Following is the list of all the features of a sole&nbsp;proprietorship:<\/strong><\/p>\n\n\n\n<ul><li><h3>Formation and Closure of business<\/h3><\/li><\/ul>\n\n\n\n<p>To commence a business as\na sole<strong>&nbsp;<\/strong>proprietorship, there are\nno such legal formalities to be followed; in comparison to other forms of\nbusiness, it is the simplest business form. But sometimes, a licence or a\nregistration number might be needed.&nbsp;<\/p>\n\n\n\n<p>E.g., if you want to open\na medical shop, you must obtain a license under the Drugs and Cosmetic\nAct.&nbsp;<\/p>\n\n\n\n<ul><li><h3>Unlimited Liability<\/h3><\/li><\/ul>\n\n\n\n<p>The owner of the sole\nproprietorship has the ultimate liability on his shoulders, unlike other\nbusiness forms. The proprietor is responsible for paying all the debts, even if\nhe has to pay them using his assets.&nbsp;&nbsp;<\/p>\n\n\n\n<p>To put it simply, if\nbusiness funds are insufficient in a scenario, then the owner has to use their\nassets to pay off the debt.&nbsp;<\/p>\n\n\n\n<ul><li><h3>No separate legal entity<\/h3><\/li><\/ul>\n\n\n\n<p>Like other business forms,\na sole proprietorship has no separate legal entity from its owner. It means the\nowner bears all the responsibility for the business activity.&nbsp;&nbsp;<\/p>\n\n\n\n<p>A business under the sole\nproprietorship has no separate legal entity from that of its owners. In the\neyes of the law, there is no distinction between the owner &amp; his business.\nIt means that the business owner has to bear all the responsibilities of their\nbusiness activities.<\/p>\n\n\n\n<ul><li><h3>No Sharing Of Profit Or Loss<\/h3><\/li><\/ul>\n\n\n\n<p>As the owner is the sole person running the business, therefore there is\nno need to share the profit or loss. &nbsp;&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_Are_The_Demerits_Of_A_Sole_Proprietorship\"><\/span>What Are The Demerits Of A Sole\nProprietorship?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A sole proprietor has the following\ndisadvantages:<\/p>\n\n\n\n<ul><li>Limited Resources<\/li><li>Unlimited Liability<\/li><li>Lack of Continuity of Business<\/li><li>Lack of Professional Skills and Expertise<\/li><li>Risk of Wrong Decisions<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"List_of_Documents_Required_For_Registering_A_Sole_Proprietorship\"><\/span>List of Documents Required For Registering A Sole\nProprietorship <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Before registering a sole proprietorship, you need\nto gather the following documents: <\/p>\n\n\n\n<ul><li>A copy of the proprietor\u2019s PAN card.<\/li><li>Details regarding the name and address of the\nbusiness.<\/li><li>Bank account details of the business.<\/li><li>Registration number received under the Shop\nand Establishment Act of the respective state.<\/li><li>GST registration number. (This is only\nrequired when the business turnover exceeds INR.20 lakhs.)<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Steps_Involved_In_the_Process_for_Registering_a_Sole_Proprietorship\"><\/span>Steps Involved In the Process for Registering a Sole Proprietorship<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Following is the step by step processes for registering a Sole\nProprietorship:<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">STEP 1: Gathering All the Documentation<\/h3>\n\n\n\n<p>Before starting your\nbusiness, the owner must gather all the documents required for the registration\nand decide on the principle place where you want to establish your business. A\ncomplete list of all the documents is mentioned below. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">STEP 2: Selecting a Unique Name<\/h3>\n\n\n\n<p>After gathering all the\ndocuments, the proprietor must select a name for the business. The name needs\nto be unique in the sense that it must not infringe the intellectual property\nrights (IPR) of any registered trademark. For this one can conduct a trademark\nsearch on the IP Indian portal <\/p>\n\n\n\n<p>Also, it is advised to\nregister your name under the trademark law, to protect your business name from\nbeing copied by others. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">STEP 3: Obtaining MSME \/ Udyam\nRegistration \/ Udyog Aadhar<\/h3>\n\n\n\n<p>After selecting the name,\nthe owner has to open a new bank account in the name of the business. But for\nopening a bank account, the sole proprietor needs two mandatory documents, that\nare Udyog Aadhar card and the MSME or Udyam Registration Certificate. <\/p>\n\n\n\n<p>Thought these documents a business owner can seek online MSME services with the benefits offered by the various other government department, in addition to all the benefits offered under <strong>the Micro, Small and Medium Enterprises Development Act, 2006<\/strong><sup><a class=\"text-primary\" href=\"https:\/\/samadhaan.msme.gov.in\/WriteReadData\/DocumentFile\/MSMED2006act.pdf\"><strong>[1]<\/strong><\/a><\/sup>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\">STEP 4 \u2013 GST Registration<\/h3>\n\n\n\n<p>Any business in India\ncannot sell goods or services without GST registration. But if the business\nactivities of a sole proprietorship are restricted only within a state, then\nthe owner might not need to take the GST registration.<\/p>\n\n\n\n<p>But there is an added\npoint to this, if the turnover of the business crosses INR Forty lakhs in a\nsingle financial year or the firms which are enrolled under particular category\nstate and their turnover of the business crosses INR Twenty lakhs, must obtain\nGST registration. <\/p>\n\n\n\n<p>In simple terms, if\nbusiness turnover crosses INR 40 lakhs (in case of supply of goods) and INR 20 lakhs\n(in case of supply of services), must obtain GST registration. <\/p>\n\n\n\n<h3 class=\"wp-block-heading\">STEP 5 \u2013 Other Tax Registrations<\/h3>\n\n\n\n<p>Based on the nature of\nbusiness activity and the location of business, a proprietorship owner is required\nto obtain TAN, IEC and PT Registrations. TAN is required to comply with TDS\nlaws while the IEC Code is required for businesses involved in import and\nexport of goods or services. Proprietorships are required to obtain PT\nregistrations in certain states where Professional Tax is mandatorily imposed\non professionals.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Compliance_for_Proprietorship_%E2%80%93_Registering_a_Sole_Proprietorship\"><\/span>Compliance for Proprietorship &#8211; Registering\na Sole Proprietorship <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The following are some of the compliance that are applicable on a sole\nproprietorship:<\/p>\n\n\n\n<ul><li><strong>Income Tax\nFiling:<\/strong>&nbsp;The\nbusiness owner of a proprietorship are required to file personal income tax\nreturn under ITR-3 or ITR-4.<\/li><li><strong>GST Return\nFiling:<\/strong>&nbsp;If\na proprietorship has GST registration, GST return must be filed every month and\nquarter as per the scheme under which the business is registered.<\/li><li><strong>TDS Returns:<\/strong>&nbsp;In case the proprietorship is having\nemployees or purchasing goods\/services beyond a certain threshold &#8211; tax must be\ndeducted at source and TDS returns must be filed every quarter.<\/li><li>There are some other compliances also based on the industry and the\nlocation of the sole proprietorship. <\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>A sole proprietorship is recognised as the sole trader of the company, who is responsible for all the activities of the company. In the instance of a sole proprietorship, there is no distinction between the owner and its business. Even though this form of business has a lot of disadvantages but still it is chosen but many in India. Because this form is suitable for a small scale business where the owner can fulfil its demands. In order to sum up the discussion, it would be right to say any business form comes with its pros and cons. It seems very easy to establish a sole proprietorship, but it is not a piece of cake.<\/p>\n\n\n\n<p class=\"text-left\"><b>Read Our Article<\/b>: <mark style=\"background: #fffd03 !important;\"><a href=\"https:\/\/corpbiz.io\/learning\/registration-of-a-online-sole-proprietorship-firm-in-india\/\">An Ultimate Guide To Registration Of A Sole Proprietorship Firm In India<\/a><\/mark><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A proprietorship is known as a state of owning a business or holding property to earn profits. It has been generally seen that the term proprietorship and sole proprietorship have simultaneous usage. The sole proprietor carries the business exclusively by and for himself. He takes control of all the activities of the business. He is [&hellip;]<\/p>\n","protected":false},"author":48,"featured_media":51668,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[159],"tags":[3005],"acf":{"service_id":"6"},"authorName":"Astitva Kumar","authorImageUrl":"https:\/\/corpbiz.io\/learning\/wp-content\/uploads\/2022\/12\/MicrosoftTeams-image-27.jpg","authorDescription":"Astitva Kumar is an advocate by profession and has completed her BBA. LLB from IP University. She is an avid reader, researcher, and legal writer. Her areas of interest include mediation, conflict resolution, finance, cyber laws, and taxation.","postViews":2203,"readingTime":5,"_links":{"self":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/51660"}],"collection":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/users\/48"}],"replies":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/comments?post=51660"}],"version-history":[{"count":8,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/51660\/revisions"}],"predecessor-version":[{"id":54863,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/posts\/51660\/revisions\/54863"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media\/51668"}],"wp:attachment":[{"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/media?parent=51660"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/categories?post=51660"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/corpbiz.io\/learning\/wp-json\/wp\/v2\/tags?post=51660"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}