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.
Source
url - https://swaritadvisorsindia.wordpress.com/2018/10/17/sole-proprietorship-registration-how-with-expert-help/
