If your aim is to own & operate your own business then Sole Proprietorship Registration is one of the best decisions to start with. One of the easiest forms of business entity to form with.
You just need to register your Sole proprietorship firm in India & enjoy the benefits of being a sole proprietor.
What Is A Sole Proprietor?
Sole proprietor means a solely owned business operated by the individual by earning of his own. They are owners of their own decisions and take care of their own revenues & expenses. Further, no one has interference in their businesses.
It is Cost-effective to set up these businesses in the form of sole proprietorship and there is much more autonomy in relation to providing work on time to customers.
What are the advantages of a sole proprietorship Firm Registration?
As we discuss the advantages of a Sole proprietorship, it has freedom and flexibility for the proprietor. Below are the few advantages that it has for registering it.
These are :
1. Set up is easy for sole owner: It is easy to set up the sole proprietorship as there are no concepts in business entities like shares & board of directors selection.
For the one who wants to get it registered as a sole proprietorship, some of the necessary licenses are like GST registration & MSME certificates. Other licenses will depend on the legal business you want to start.
2. Decision-making Authority: You are fully responsible for making your own decisions. No one will be responsible for any losses or profits. You are free to do business which is best for you.
3. Front cost is low: As registering for sole proprietorship, the cost you will bear is very much low as compared to the other business entities. Further starting with a very minimal cost you can get it registered.
4. Compliance requirements: As we have discussed the compliances, there is a requirement to file GST and Income Tax returns in a sole proprietorship. It totally depends upon the sale and purchase you do in your business. Legal experts are also here with JustStart who can help you for filling the GST returns for you. Pay your taxes on time to avoid penalties by filing GST returns, income tax returns, etc on time.
What Are The Disadvantages Of Sole Proprietorships?
As we talked earlier about the advantages of a Sole proprietorship, it has many disadvantages also. These are:
Raising capital is difficult: Starting a business in a sole proprietorship, initial costs are very low but at the time of raising capital when the business will grow it will be difficult to finance it.
Risk for your Personal Assets: Personal assets are at risk because you are the sole owner of the business. Further in the future, if the business is sued or you have to file bankruptcy then the court will have to seize all your personal assets.
No perpetual Existence in Sole proprietorship company: There is no perpetual existence in a sole proprietorship company because there is just one sole member and in it, if in case something happens to the sole member, the business will be shut down.
How To Start With A Sole Proprietorship?
One of the most important questions is how to start with a Sole proprietorship. Make sure the business you will have to set up is best for you. Making your mind up is very important for any business. Getting new ideas for your business will make you rise high. If you have a name/brand for your business, then get it registered by getting a trademark for the business name so that no one can steal or copy your brand name. Our legal experts can also help you in registering your trademark.
Steps to follow for starting with a sole proprietorship:
- Make sure the business you want to start is right.
- Apply for the Pan Card if the proprietor is not having a Pan card.
- Get a GST registration Certificate if the turnover exceeds Rs. 40 Lakhs.
- Apply MSME certificate with the help of legal consultants.
- The proprietor needs to obtain the Shop & Establishment Act of the state in which he/she is doing the business.
- Open a Bank account for the business. All the transactions can be done through the sole proprietor company bank account.
- Adequate insurance is a must for the business.
What are the documents required for Sole Proprietorship Registration in India?
Documents are very simple in getting sole proprietorship registration online. These are:
For GST Registration-
- Passport Size photos of the proprietor
- Identity proof of the Proprietor like Aadhar card/voter Id proof /Pan Card.
- Electricity bill of the premises. If on rent, there will be a Non-Objection certificate required.
- Email Id & contact details of the proprietor
For MSME Certificate-
Bank account details are required/ Canceled Cheque in the name of the authorized signatory.
What Is The Process For Registering Sole Proprietorship In India?
Sole proprietorship registration process is very simple & requires not much footwork to get it started. Just Submit your documents to the team of legal consultants and they can get your process started with the filing of an application. All the process is online.
The process will take hardly 7-10 days if the documents provided are appropriate. It totally depends on the government approval & reverts from the departments.
What Are The Compliances Required For Sole Proprietorship Company Registration?
As a sole proprietor, you just need to file your income tax return annually. Further, you have to file the GST return if you have GST registration. File all the returns on time to avoid penalty. If you opt for other permitted licenses for your business then you need to comply with the compliances relating to them also on time. For shop & establishment acts you need to renew your license at the prescribed time given by the state.
What Are The Closure Requirements For Sole Proprietorship India?
As sole proprietorship does not require any mandatory legal registration, the closure of such firms is also very easy and can be done by
- By surrendering the GST
- Surrendering any other licenses if any like shop & establishment act registration.
- Closure of the bank account opened for the proprietorship firm registration
Conclusion About Sole Proprietorship Registration Firm
When summarizing all the above points, starting a business as a sole proprietor is one of the best choices you will ever have. No profit sharing and all the rewards will be yours though. Further, all the losses will also be borne by you.
The good part is that all you have to do on your own, no building leasing, hiring is your choice, and you will build a strong foundation of your own. So why wait? register with us today & enjoy the privileges of being a Sole proprietor of your company with JustStart.Our legal experts will provide you with the best service & will kick-start the process.