What are the Requirements for Registering a Sole Proprietorship
Created on 20 Aug 2018
Wraps up in 2 Min
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Updated on 19 Oct 2019
In a Sole Proprietorship, only one corpse or human being executes the business. Accordingly, the holder and the business are examined as individual material and substances. In other words, there is no variety between the sole-proprietorship and its possessor. Business drafted out by a single person is not like conventional and classical businesses. It is more of a one-man-show which is not expandable beyond an assertive point. Moreover, there is no decree or law leading its listing and working.
- No legal criteria, you need to open a Current Account in the name of the Sole Proprietorship and ascertain a Trade License. The Current Account will, by distress be opened on the name of the person as mentioned on his/her PAN card and therefore the bill/invoice will be issued on the same name.
- Sole Proprietorship is highest or excellent for scribe as it has basic and crucial compliance and supplementary tax benefits as compared to a Private Limited Company/LLP.
- Notwithstanding, big corporations sometimes do not promote running with Sole Proprietors as it has drawback of unlimited liability as well as inability of completing all the aspects involved in a business efficiently.
Documents for Listing
There is no precise process for registering a Sole-proprietorship. But, you can register your business under various other acts such as:
- Shops and Ascertainments
Notwithstanding, please note that you don't need to register under these acts unless you fall under the category that mandate such registration. This is because there is a threshold limit which excuses from oneself from mandatory listing until you reach a specific turnover. Furthermore, you will also need to open a current account in a bank for your business. For a coherent listing process, please keep the following documents ready. These documents will serve for all the above listings and also for opening a current account.
- Copy of your PAN card.
- Address proof in your name, such as passport, voter ID, or utility bills.
- Your passport sized photographs.
- Proof of address for your business such as telephone or electricity bills.
- Shops and Ascertainments listing certificate (for opening current bank account)
- Bank account statement (for at least 6 months) from the current banker.
- Current account details (for VAT/CST/Service Tax listing).
Blueprint for Listing of Sole Proprietorship
It depends upon the type of listing. Therefore, there is no fixed timeline. The process of listing may take anywhere between 2 to 20 working days. This is further subject to government procedure and endorsement.
Tax duty and obligation under Sole Proprietorship
Proprietorship with less than Rs. 3 lakhs of income are not required to pay any income tax, as proprietorships are taxed as the individual does with his business. Simultaneously Sole Proprietorship doesn’t enjoy certain tax deduction and other benefits thereto unlike LLPs and other businesses.
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