Check what are the documents required for sole proprietorship firm registration in India. Apply online for necessary license & certification.
The simplest type of business to operate in India is a sole proprietorship because it is not subject to any particular laws. The requirements for sole proprietorships are straightforward and basic. A sole proprietorship is a company run by one person. One individual is in charge of managing and making decisions for the company.
Documents Required For A Sole Proprietorship
Aadhar Card
In India, obtaining an Aadhar number is currently required in order to register for anything. Additionally, the PAN card must be linked to the Aadhar number in order to file an income tax return. If you don’t yet have an Aadhar number, get in touch with your local E-Mitra or Aadhar Seva Kendra. A tangible copy of the Aadhar card is delivered to the registered address in about 15-20 days after the application is submitted.
PAN Card
Before obtaining a PAN, you cannot file your income tax return. Apply for a PAN number as soon as possible if you don’t already have one. Online PAN card applications cost roughly Rs. 110. You need a scanned copy of your photo, identification, and address documentation to apply.
When the form is verified using Aadhar e-KYC, it can be submitted online. Following submission, the PAN card application is verified at NSDL, and if NSDL determines that the information is correct, it assigns the PAN number within 7-8 days. Additionally, the registered address receives a hard copy of the PAN card in 15 to 20 days.
Also read about: Sole Proprietorship Registration Online Process, & Fees in India
Bank Account
Once you have your PAN and Aadhar number, you can go to any bank to create an account there. You also need to have an identification and address proof in addition to your Aadhar number and PAN. You must also present a GST registration paperwork to the bank representatives in order to open a current account.
Registered Office Proof
- Rent agreement and a landlord’s NOC are required if the property is rented.
- Electricity bill or any other utility bill, or the sale document, if it is a self-owned property.
Registrations Required For A Sole Proprietorship
A few registrations are also necessary to prove the firm’s existence in addition to the documents mentioned above:
Registering as MSME Udyam
Under the MSME Act, you can register your business as a Small and Medium Enterprise (SME). The application may be submitted digitally. Even though it is not required, registering as a SME has many advantages, particularly when applying for a company loan. For SMEs, the government administers a number of schemes through which loans are made available at a reduced interest rate.
Shop and Establishment Act License
According to municipal regulations, a Shops and Establishment Act License must be obtained. It is given out according on the type of company and the number of employees. In general, this licence is required of all sole proprietors who open a shop or other type of business.
GST Registration
If your annual turnover exceeds Rs. 40 lakhs, you can register yourself for GST. Additionally, if you are conducting an online business (selling on Flipkart, Amazon, etc.), you must obtain a GST number. You need the following documents to register for GST:
- PAN card, picture, and owner’s Aadhar card
- Evidence of a company location (rent agreement or electricity bill)
- copied bank statement (first page for verifying bank account number, address and IFSC code)
The GST portal makes it simple to register for GST. Typically, 3–4 days after the application is submitted, the GST number is obtained.
Frequently Asked Questions on documents required for sole proprietorship firm registration
Whose name should the PAN card for a sole proprietorship firm be obtained in?
The proprietor’s name will appear on the PAN card for the proprietorship business. The sole proprietorship firm does not receive a company PAN card since it does not have a separate legal existence from that of a corporation. A solitary proprietorship business is associated with the owner or proprietor. Therefore, the owner/proprietor of the single proprietorship business may utilise his or her own PAN.
Should the sole proprietorship firm’s name be on the bank account?
Yes, the solo business owner must create a bank account in the name of his or her sole proprietorship business. A sole proprietor must open a current account and conduct all transactions related to their sole proprietorship firm through that account.
What kinds of paperwork are needed to start a bank account?
You must provide proof of your sole proprietorship’s business and registered office address in order to open a current account. Proof of the existence of the single proprietorship firm can be found in the form of a GST registration, an MSME registration, or a Shops and Establishment Act licence.
You can submit any licence or certificate issued for your sole proprietorship, such as a labour licence, mandi licence, police department permission or licence, sales tax registration certificate, consent to operate document issued by the state or central pollution control board, gramme panchayat certificate, importer-exporter code certificate, TAN/TIN certificate, etc., if you don’t have these registrations.
What does an e-commerce/online business’ registered office evidence look like?
You can lease a space to use as an office for your internet or e-commerce firm. Your evidence of registered office address will be the lease and owner’s NOC for operating your single proprietorship business. The commercial electricity bill for your home will serve as the registered office address proof if you run your online or e-commerce firm from home.
I recently launched a sole proprietorship from my home? What is the proof of the registered office?
Your home address will serve as the registered office proof in such a scenario. If your home is rented, you will need to provide the rental agreement and the owner’s NOC in order to prove that your home is your office location. If you run a sole proprietorship out of your home, you can provide documentation of your office address in the form of a commercial electricity or gas bill, a delivery/dispatch receipt for goods or services provided to clients, or both.
Which permits are required to be obtained in order to operate a sole proprietorship?
In general, it doesn’t need to be registered as such. The fundamental licences needed by a sole proprietorship are:
Certificate of Registration issued by the state where the firm is located under the Shops and Establishments Act.
GST registration for Sole Proprietor
MSME Udyam Aadhar Certification
Is it necessary for a sole proprietorship to have a GST licence?
It is required to complete a GST registration if your company’s annual sales or turnover exceed the threshold of Rs. 40 lakh. However, if their threshold limit exceeds Rs. 20 lakh, enterprises registered in special category states must register for GST. Regardless of their turnover, every online merchant on an e-commerce aggregator site like Flipkart or Amazon must be registered for GST. Any person or organisation considering starting their own online store needs to be registered for GST.
Hoping you have understood what are the documents required for sole proprietorship firm registration in India.
Disclaimer: The information presented here is only meant to be informative. By using or accessing the site or its contents, you are not entering into an attorney-client relationship. This website’s content is not intended to be legal or other expert advice. It should not be relied upon for such purposes or utilised in place of legal counsel provided by a lawyer admitted to practise in your state.
