Sole Proprietorship Registration is a simple form of
business entity with minimum regulatory compliances. It is owned by the single
owner whose liability will be unlimited. Under this, owner is called as Sole
Proprietor. To start with sole proprietorship, one has to acquire license according
to the business type such as registration under GST, Shops and Establishment
Act, MSME registration and food license in case of food business. However there
are threshold limits which exempts from compulsory registration.
Features of Sole
Proprietorship Registration
Ø Full control over the business
Ø Unlimited Liability
Ø Decision making power
Ø No Perpetual Succession
Ø It is not a separate legal entity
Ø Lesser regulatory compliances
Advantages of Sole
Proprietorship Registration
Ø Easy formation
Ø Taxation Benefits
Ø Decision making power
Ø Less legal compliances
Ø Lower formation cost
Disadvantages of Sole
Proprietorship Registration
Ø Limited Ideas
Ø Unlimited Liability
Ø Lack of Credibility
Ø Inability to raise funds
Ø Further addition of partners cannot be done
Documents required for
setting up Sole Proprietorship Registration
There is no prescribed process of Sole ProprietorshipRegistration. It can be done as per the type of the business activity.
In
case of registration under Shops & Establishment Act
Ø Copy of PAN of Proprietor
Ø Copy of Identity Proof (Aadhar/ Passport/ Voter ID)
Ø Bank Statement
Ø Copy of Address Proof
Ø Passport Size Photograph
In
case of Tax Registration(GST Registration)
One has to obtain GST registration, in case turnover exceeds
Rs.20 lakhs and Rs.10 lakhs in case of north east region. However in some cases
GST registration is required to be obtained.
Following below mentioned documents are required for GST
registration:
Ø Copy of PAN
Ø Copy of Aadhar Card
Ø Proof of business location
Ø Copy of bank statement
Ø Passport size photograph
In
case of Bank Account Opening
Bank account can be opened on the name of the Company, if
proprietor has obtained any of the license. As banks ask for legal
certification from the proprietor.
Following below mentioned documents are required for bank
account opening as per RBI for KYC such as:
1.
License issued under
Shops & Establishment Act;
2.
GST registration
certificate
3.
Certificate of Practice
issued by authorities such as following:
Ø Institute of Chartered Accountants of India,
Ø Institute of Cost Accountants of India,
Ø Institute of Company Secretaries of India,
Ø Indian Medical Council, Food and Drug Control Authorities.
5.
IEC (Import Export Code)
issued to the proprietor by the DGFT.
6.
Income Tax Return (ITR)
7.
Utility bills on the
name of the proprietor.
Usually sole proprietor finds it difficult to manage all the
business activities solely and they decide to convert it into another form of
business entity.
Sole proprietorship is best for small entrepreneurs as it
involves low formation cost. Our team of experts will help you in Sole
Proprietorship Registration process. They will verify the documents and start
the necessary process.
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