Do You Need To Register As A Sole Proprietor

A Sole Proprietorship form of business organisation organisation is where a business is managed by a unmarried person. Generally, it does non require any registration equally such. Whatever individual who wants to first a business with less investment can choose this type of business organization course.

The control of the business is solely in the hands of the single proprietor/owner. A single person who wants to first a business from home or on a premise with a minimum amount can opt for this class of business concern type.

The investment for the sole proprietorship business organisation will exist done past the single proprietor. He bears all the losses of the business concern and enjoys all the profits. He controls the business likewise as manages it. He can engage persons for conducting the business concern, but the ownership volition rest solely with him.

Many local businesses such equally grocery stores, parlours, boutiques, retail stores, etc., can be established as a sole proprietorship firm. Fifty-fifty modest traders and manufacturers can institute a sole proprietorship business firm.

Who can opt for Sole Proprietorship?

Any person who wants to outset a business with less investment can opt for this type of business form. It tin exist started in a fourth dimension bridge of 10-xv days. As well, the control in the business organization is solely in your easily.

Advantages of Sole Proprietorship

Less compliances

The sole proprietorship business can be started hands by just one person. At that place is minimum compliance that is required to be adhered to get it incorporated. This form of business organization is economic as it is relatively less expensive to start than a company or LLP.

Control of the business organization

The sole proprietor will accept complete command over the business. He will look after all the aspects of the business. Since merely one person is running the concern, secrecy can be maintained.

Quick determination making

The sole proprietor takes all decisions of the business organization. The decision making rests with a single person. Thus, the decisions can be taken speedily and immediately without the need for consulting anyone.

Disadvantages of Sole Proprietorship

Unlimited liability

There is an unlimited liability on the sole proprietor. He is personally liable for all the transactions he enters in the business organisation. If any loss occurs, he will have to bear the whole loss out of his personal estate.

No perpetual succession

There is no perpetual succession which means it tin come to an end if something happens to the sole person taking care of the business. It can shut down at any time. This makes the business organization unreliable and hard to gain public trust for entering into agreements or contracts to expand the business concern.

Difficult to raise funds

Since a single person manages the business, it is non piece of cake to heighten capital. The capital of the concern is from the investments put in by the sole proprietor. The sole proprietorship business firm has no split legal entity status from the owner. As it tin come to an end at any time and there is no separate entity, it is hard to obtain funds from third parties.

Registration of Sole Proprietorship

The procedure for incorporating a sole proprietorship firm is-

Applying for PAN carte.
After obtaining a PAN carte, or if the proprietor already has a PAN menu, the next footstep is to go on a proper name for the sole proprietorship business.
The next step is to open a depository financial institution account in the proper noun of the business. All the transactions of the business will be through this banking concern account.
Though no specific registration is required for starting a sole proprietorship business firm, certain basic registrations are required to be obtained past a sole proprietorship firm for doing business. The bones registrations required by a sole proprietorship are-
- The proprietor needs to obtain the Registration Certificate under the Shops and Establishment Deed of the state in which the business is located.
- The sole proprietorship should too annals for GST if the concern turnover exceeds Rs.20 lakh.
- The sole proprietorship can also register equally a Small-scale and Medium Enterprise (SME) under MSME Human action, though it is not mandatory, it is beneficial to exist registered under the aforementioned.

Documents Required for Sole Proprietorship

The documents required for registration of Sole Proprietorship are-

Aadhaar Carte du jour.
PAN Carte.
Registered Office proof.
Bank Account.

Checklist required for Sole Proprietorship

PAN Bill of fare of the proprietor.
Name and accost of the business organization.
Depository financial institution Account in the name of the concern.
Registration under the Store and Institution Act of the corresponding state.
Registration under GST, if the business turnover exceeds Rs.20 lakhs.

What are the Compliances required?

Equally a sole proprietor, you must file Income Tax Return annually. Too, you need to file your GST Return if y'all are registered nether GST. A sole proprietor should also deduct TDS and file TDS return if liable for Tax Audit.

Timelines for Sole Proprietorship Registration

The Sole Proprietorship requires opening a bank business relationship in the name of the business, a Certificate of Registration under the Shop and Institution Act of the respective state and GST Registration. The registration process takes approximately 10 days, subject area to departmental approval and reverts from the respective department.

Get an expert at affordable toll

For ITR, GST returns, Company Registration, Trademark Registration, GST Registration