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Keynotes on Proprietorship Firm Registration

It takes 10 to 15 days for Proprietorship Firm Registration
Completely online service - No physical presence required
No minimum capital requirement


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What is known as Sole Proprietorship?

A sole proprietorship is neither a corporation nor a company. The business is owned by an individual. Objective for sole proprietorship firm registration includes opening a current bank under the name of a small business.

When an individual has products or services as sole proprietor, he/she may start selling it. A lot of entrepreneurs are continuing to sell their product under sole proprietorship.

Generally, the income or loss is considered as the business income or losses by the proprietor in his or her personal income tax return.

What is known as sole proprietorship registration in India?

Sole proprietorship registration is 100% digital process. Thus you can register your business without leaving your home or office. If you want to commence a sole proprietorship business, it is necessary to start with a number of basic needs. You need to have a current bank account on the name of business to facilitate its easy operations.

It is easy to start a business as a sole proprietorship firm in India with reduced costing and compliance. Sole proprietorship registration is needed for individually owned business. In India, doing business becomes easier so it is recommended to perform registration. This facilitates a business operating smoothly without any legal issue. Any of the following registration procedure should be selected:

Registration as SME

Registration of shop and establishment according to the law of the particular state

GST Registration

Aspects of Sole Proprietorship firm registration

Individual's capital – In order to start the business or to continue its operations, the capital invested by the sole proprietor only. This can include his personal resources or borrowing.

Profit and Loss is not shared – All the income or loss generated from the sole proprietorship business belongs to owner only as business profit and loss is not shared.

Unlimited Liability – Unlimited liability is the main disadvantage of sole proprietorship business. If there is any loss, personal assets of the owner can be used.

Single Ownership – The complete business is owned by a single individual and entire assets and liabilities belong to him. All the risks linked with the business is also that of the proprietor.

Central and Single Management – All the activities and central administration are managed by a single person.

Reduced Legal Formalities – This type of business involves fewer legal formalities this is why it is easy to start, operate and end.

No legal dissimilarity between Business and Proprietor – There is not any legal difference between sole proprietorship business and its proprietor. Performance, expertise and intelligence of the owner are used by the sole proprietorship business for its operations.

Needs after the registration of Sole Proprietorship Business

Follow GST Registration law for Proprietor

Avail advantages of MSME (Ministry of Micro Small & Medium Enterprise) Registration

Use of HAC or SAC Code cautiously at the time of GST Registration

Get professional services for GST Returns Monthly or Quarterly

All business and other income should be added in personal income tax return

Process of Proprietorship Company Registration

Step 1 – Decision about the type of certificate to register sole proprietorship business in India

Step 2 – Coordination with our management and uploading your document for proprietorship registration online

Step 3 – Necessary payment after documentation as mentioned by our executive

Step 4 – You will acquire your certificate from the government after completing above 3 steps. Mail will be sent by govt department regarding approval of the online request for your proprietorship company registration.

Documents necessary for Sole Proprietorship Registration

Sole Proprietorship isn't controlled by any particular laws and it includes least and easy compliance process. Following documents are compulsory for sole proprietorship registration:

Registered office proof

Aadhaar Card

PAN Card

Personal Bank Account

Advantages of Sole Proprietorship Registration in India

Facilitates informed decision making so prompt action can be taken

Secrecy of business is maintained

Minimum record keeping

Flexibility to perform operations

It includes the oldest and simplest type of business

Own accountability

Business can be established without hassle. It can exist automatically once start to sell something

No need to file any second set of business tax forms

Lowest tax rates

Financial accounts or any other documents are not required to be published to the public. Therefore privacy is maintained that is crucial in business.

Profit is not required to share

Maximum incentive from the business is made by proprietor

Improvement of self-worth

Convenient start and end process

Direct control

Being own boss along with greater achievement and satisfaction. Examples of sole proprietorship business are chemist shop, grocery shop, fabrication units, beauty parlours and others.

Disadvantages of a Sole Proprietorship Business

Unlimited personal liability for loss and other business liability

Limited capability to raise capital

Limited business life

Entire responsibility to make everyday business decisions is concentrated on the owner

Owner is taxed as a single individual

Generally investors won't invest in sole proprietorships

Legal provisions for a sole proprietorship include the following:

Taxes - Any income earned by the sole proprietorship business is known as personal income, for which personal taxes are required to be paid. At the same time, there are no business taxes. Income taxes and advance taxes are to be paid based on income earned in previous quarter.

Besides income tax, a business should perform the following :

Payment of property tax on any real property like land and buildings

Collection and payment of GST on taxable goods and services sold

If a sole proprietorship business includes employees, employment taxes must be collected, reported and paid


Proper books of accounts of sole proprietorship firm must be maintained

Audit is not mandatory if annual turnover is below Rs. 1 Crore. However internal audits may be conducted to identify loopholes and defaults if any

Proprietorship Firm Registration includes following other legal requirements:

No statutory requirement while registering a sole proprietorship business. However to grow the business following factors may be considered:

Shop and Establishment Act License

This license is not compulsory in all the states in India. Though wherever it is compulsory, it is acquired.

Procedure to open Bank account for Sole Proprietorship

Get PAN for the sole proprietorship
Obtain GST registration certificate
Aadhaar Number and PAN of the proprietor is a must
Identity proof and address proof are compulsory
Visit any bank to open an account
Producing other business related documents required by the bank

Frequently Asked Questions

Ques: What is called a sole proprietorship business?

A sole proprietorship is an entity which has a single owner and entire decisions of the business is taken by him or her. It can be registered or unregistered.

Ques: Why sole proprietorship business?

Sole proprietorship is convenient for those who want complete control over business and want to be their own boss. It is ideal for those who don't like to work under others.

Ques: Is it essential to register proprietorship business?

No, it is not essential to register the sole proprietorship business.

Ques: What is the responsibility of sole proprietorship business?

Unlimited liability is associated with sole proprietorship business. Personal assets of the sole proprietorship can be used for paying off the liabilities of the sole proprietorship.

Ques: What are the needs to begin the sole proprietorship?

To start the sole proprietorship business, one must get the essential license.

Ques: What is the annual compliance need for the sole proprietorship?

There is not any annual compliance associated with sole proprietorship. However proprietor must file annual compliance while submitting his or her income tax return.

Ques: Is it possible to register a brand name under the sole proprietorship business?

Yes, it is possible to register a brand name under the sole proprietorship business.

Ques: What are the advantages of sole proprietorship business?

The sole proprietorship business includes a number of advantages:

Easy setup

Sole control over management

Reduced cost

Low taxation

Ques: What are the disadvantages of sole proprietorship business?

Many disadvantages are included with sole proprietorship business like:

Lack of resources

Unlimited liability

Credit cannot be raised easily

Reduced credibility

Ques: Can a sole proprietorship business be converted into any other entity?

Yes, by following necessary method, a sole proprietorship business can be converted into any other entity.

Ques: What are the difference between proprietorship and any other business?

A sole proprietorship differs from other types of business in following ways :

Sole proprietorships need no formal paperwork to set up and it does not need to be registered with the state.

Sole proprietorships are the simplest and most inexpensive type of business.

Sole proprietorships are considered as simple income for tax purposes and do not require preparing separate taxes.

Ques: What documents are needed to register sole proprietorship business?

For the registration of proprietorship, following documents are needed:

Aadhaar Card is compulsory

Address Proof Of owner

PAN Card of owner

2 Passport size photos

Bank Account Statement of Proprietor

One Click Business Solutions Private Limited offers premium quality business services like company registration, tax & compliance, business alternation, company conversion, GST registration, Trademark registration and others. We have a team of experienced professionals to deal with various services in professional approach and fastest turnaround time. We are the most preferred for the start-ups as we charge cost-effective rate to deliver our services since we know the value of money for start-up businesses.

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