What Is Sole Proprietorship Registration?
A sole proprietorship is the simplest way to start a business in India. It is owned and run by one person. This individual assumes full control of the business. The administrative burden is minimal. Although, there is no opportunity for partnerships and no protection for personal assets in case of sole proprietorship registration. This structure is most suitable for very small businesses with no more than five employees
Benefits of registering a proprietorship firm in India
The benefits of Proprietorship firm are as follows:
Easy Registration:
A sole proprietorship is easy to start because it doesn't involve any complex process of paperwork. However, the proprietor may need to get some licenses to operate business in India.
Minimum Compliance:
Compared to other types of businesses, like LLP or company, sole proprietorship registrations have less rules to follow.
Simplicity:
The proprietor can easily operate this business with minimal regulatory compliance, because there are no partners or directors. Small businesses work well with this kind of business structure.
Decision Making:
The owner is sole decision maker as there is no any other person involved in this business framework. The owner has total control over everything in the business, like money, assets, and operations.
Proprietorship Compliances for sole proprietorship registration
Here we have discussed some of the compliances that are compulsory for a sole proprietorship:
Income Tax Filing: Proprietors must file personal income tax returns using forms ITR-3 or ITR-4.
Business Income: Declarations of business income are only allowed through ITR-3 and ITR-4 forms. Hence, all the proprietors need to file ITR-3 and ITR-4 forms.
GST Return Filing: If a proprietorship is registered for GST, monthly or quarterly GST returns must be filed according to the chosen scheme.
TDS Returns: If you register sole proprietorship in India with employees or significant purchases must deduct taxes at source and submit TDS returns every quarter.
Additional Compliance: Depending on their industry and location, proprietorships may be subject to various other compliance requirements.
Documents Required For Registering A Proprietorship Firm In India
Below is the list of required documents:
An Aadhar Card is required for registration
The Pan Card of the owner is required for registration
The photograph is also a must for the registration
Utility bill of the business place such as water bill or electricity bill
Bank statement copy and other details such as account number and IFSC code
Applicants can avail of GST registration by submitting relevant e-application on the GST portal.
Any other document that is requested needs to be furnished
Procedure to register sole proprietorship in India
Step 1: Apply for the Adhar card. Apply for a PAN card if you don't have. If you already have a PAN card, proceed to the next steps.
Step2: Choose a name for your sole proprietorship business
Step 3: Open a bank account in the business's name. All business transactions should go through this account.
Step 4: You have to follow the process of Basic Registrations for Sole Proprietorship.
Step 5: Although specific registration isn't mandatory, some essential registrations are required for registering a proprietorship firm in India.
Proprietorship Registration
