Sole proprietorship registration How with Expert Help

Sole proprietorship:

A sole proprietorship is a single person firm registration. The owner is inseparable from the sole proprietorship which makes him liable for any business debts. Technically speaking although it is not a legal entity the setup, still, it is the universally accepted format. There is no formal requirement of the Sole proprietorship registration in India.

The owner is not required to pay the income tax separately for the company. The income is basically reported as the business income or losses by the owner in his /her individual income tax return.

However technically although you are not required to submit any sort of official paperwork for sole proprietorship registration, still to do business on ground level and depending on your state, county, or city, you may require rather have to obtain certain business license or permit, the kind of license or permit to be obtained will depend on the type of business you run. 

Before you establish your business by sole proprietorship registration, do browse about the following:

1.      Do not forget to inquire with your state secretary of state to know about the rules in your location for sole proprietorship registration,

2.      Be aware of different terms given and used in that state where you are willing to establish your business, as certain states use different terms for this department.

3.      You might also require to check with the business division or another similar department to see if the type of business you want to form is operating there or not?

4.      Understand this that all states do allow corporations, partnerships, but with some variations on these basic business types.

Procedure for sole proprietorship Registration:

1.      To start a business via sole proprietorship registration is the easiest form of business, only for the sake of necessity required to run a business certain registration are required to obtain as given below:

2.      Decide your business name and if needed go for DBA

3.      Open a business current account to facilitate the transaction, this constitutes very important part of the  sole proprietorship registration.

4.      To form a platform, it is advised to open a website, and

5.      Yes, finally hold on for some customers after Sole proprietorship registration.

The status of the sole proprietorship registration can be checked online at the MCA portal. 

Legal Regulations after a sole proprietorship registration:

Taxes

All the revenues earned by the sole proprietorship is considered as the personal income, and personal taxes are to be paid under self-employment taxes and estimated taxes.  

Accounts

No legal filing requirement is imposed on sole proprietorship; still it is strongly recommended that after sole proprietorship registration one must definitely get the accounts properly maintained for traceability and better accountability.

Audits for a sole proprietorship in India

Audits for LLP are not mandatory, but we suggest you conduct your own internal audits, so as to know your defaults and loopholes if any.

MSME registration for sole proprietorship in India

Again it is not compulsory to register as an MSME; however, in your own interest, it is highly beneficial. The various scheme launched by the government for SMEs, and one can avail its benefits when MSME registraion is done.

Shop and Establishment Act License for Sole proprietorship in India

This license is to be obtained in accordance with the local laws. It is issued by the municipal party.

The business license apart from a sole proprietorship registration

On the basis of the type of business certain state or local permits and/or licenses are required to be obtained to operate your business via sole proprietorship registration.

DBA’s for a sole proprietorship in India

While proceeding fro sole proprietorship registration , sole proprietorship name is quite important and  in case is not in your own name in such cases, you require to obtain DBA.DBA form is required to be filled in such cases. However, not all states require DBA or “fictitious name” forms in that case.

Keep in mind about the following:

1.      Do avail the business license as applicable in your locality after Sole proprietorship registration.

2.      Apply to the state for applicable sales tax permits and pay property tax on any real property (land and buildings) of yours.

3.      Collect and pay the GST on taxable goods and services sold.

4.      If your sole proprietorship employs certain employees pay employment taxes. 

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