A Sole Proprietorship is a type of business organisation in which a single individual manages the company. In general, there are only 3 things to do online registration. This company structure is suitable for anyone who wishes to create a business with a low initial cost.
The single proprietor/owner has complete control over the firm. A single person who wishes to start a business from home or on a premise with a small investment might choose this sort of business.
The proprietor business owner will make the investment for the sole proprietorship firm. He suffers all of the company’s losses and reaps all of its earnings. He both controls and runs the company.
Who is eligible for Sole Proprietorship Company?
This proprietorship company structure is suitable for anyone who wishes to create a business with a low initial cost. It takes around 10-15 days to get started. Furthermore, you have complete control over the firm.
The Benefits of a Sole Proprietorship Company
There are many benefits of sole proprietorship company few are listed below:
A sole proprietorship firm can be readily founded by one individual. There is a minimum level of compliance that must be met in order for it to be incorporated. This type of business is cost-effective since it is less expensive to establish than a corporation or LLP.
Management of the company
The business owner (proprietor) will have total authority over the company. He will be in charge of all areas of the company. Because the company is operated by a single individual, confidentiality may be preserved.
Making quick decisions
The sole proprietor makes all company choices. The choice is made by a single individual. As a result, choices may be made fast and without discussing with anyone.
The Drawbacks of a Sole Proprietorship
Liability is unlimited.
The solitary proprietor is subject to infinite liabilities. He is individually accountable for whatever commercial dealings he participates into. If a loss happens, he must face the entire loss from his own estate.
There is no permanent succession.
There is no permanent administration, thus it might come to an end if the sole person in charge of the firm passes. It has the ability to shut down at any point. This renders the company untrustworthy and makes it harder to win public trust for engaging into agreements or contracts to build the firm.
Fundraising is difficult.
Raising finance is difficult since the company is run by a single individual. The lone proprietor invests in the firm and provides the funds. The owner is the lone legal entity of the sole proprietorship business. It is difficult to get funding from third parties since it might terminate at any point and there is no independent company.
Advantages and Disadvantages of sole proprietorship
If your company is tiny and your capital commitment is little, consider operating as a single proprietor.
The following are some of the advantages of sole proprietorship firm in India:
- You’re in charge.
- You keep the entire profit.
- The startup expenses are modest.
- You have complete privacy.
- It is simple to start and run a business.
- If circumstances change, it is simple to modify your legal form, so you could quickly wind up your sole proprietorship company.
The following are some of the disadvantages of sole proprietorship firm in India:
- Because there is no legal separation between private and company assets, you have an infinite debt obligation.
- Your ability to raise cash is restricted.
- You are solely responsible for making day-to-day company choices.
- It might be challenging to keep top-tier staff.
- It might be difficult to take vacations.
- The life of the business is limited since you are taxed as a single individual.
Check what are the documents required for udyam registration certificate.
Sole Proprietorship Registration
The method for forming a sole proprietorship business is as follows:
Applying for a PAN card.
The next step is to retain a name for the sole proprietorship business after acquiring a PAN card, or if the proprietor already has a PAN card.
The following step is to create a bank account in the name of the company. This bank account will be used for all company transactions.
Though no special registration is necessary to launch a sole proprietorship firm, a sole proprietorship firm must get several fundamental registrations in order to conduct business. A sole proprietorship is necessary to have the following basic registrations:
The proprietor must get a Registration Certificate in accordance with the Shops and Establishment Act of the state in which the business is located.
If the business revenue reaches Rs.20 lakh, the single proprietorship must additionally file for GST.
The sole proprietorship can also register as a Micro, Small and Medium Enterprise (MSME) under the MSME Act; it is mandatory for any business in India, as it is advantageous.
Here is the link to get started for MSME Udyam registration.
What are the documents required for proprietorship firm registration?
The following for the Sole Proprietorship Documents Required are as as follow :
- Aadhaar Card.
- PAN Card.
- Proof of Registered Office.
- Bank Account details.
Checklist for a Sole Proprietorship
- PAN The proprietor’s business card.
- The company’s name and address.
- Bank account in the name of the company
- Registration under the relevant state’s Shop and Establishment Act.
- If the business’s turnover surpasses Rs.20 lakhs, it must register for GST.
What are the needed compliances?
As a sole business owner (proprietor), you must submit an annual Income Tax Return. If you are registered for GST, you must also file your GST Return. If a sole business owner is subject to a tax audit, he or she should deduct TDS and file a TDS return.
Timelines for registering a sole proprietorship
The Sole Proprietorship needs the creation of a bank account in the name of the business, a Certificate of Registration under the individual state’s Shop and Establishment Act, and GST Registration. The registration procedure takes around 10 days, depending on departmental permission and reverts from the corresponding department.
How can I determine the ownership status as a proprietor in India?
We do not have a platform to check the status of sole proprietorships in India. As a result, there is no way to monitor the status of a sole proprietorship.
If a proprietor has registered for GST and Udyam registration, then we can check the status of it.
However, once a proprietor has registered for GST registration, the proprietorship’s GST registration and filing status may be verified on the GST Portal to validate its existence. And also if the proprietor registered under the MSME act can check their msme udyam registration status on the portal.
Register as Sole Proprietorship Online in India
Registering a Proprietor Company is quick, easy, and can be done online with udyam registration centre in 3 simple steps:
Step 1: Fill out a simple sole proprietorship company registration form
Step 2: Make the online payment for the registration of sole proprietorship firm
Step 3: Get your certificate and licence on the registered email id
Follow the above 3 steps to Register Sole Proprietorship Company In India.
A proprietorship firm is one of the most basic types of enterprises in India, with no need for proprietorship company registration and a minimal number of tax and regulatory compliances. To establish a sole proprietorship firm in India, you may take advantage of our high-quality services, which are supplied by our certified, knowledgeable, and experienced team of experts. To that end, we have created a comprehensive package for proprietorship registration at the most inexpensive costs in India.