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Sole Proprietorship Registration – Online Process

proprietorship registration online

Sole Proprietorship Registration Online is single-person registration. For registering a Proprietorship firm requires no formalities or registration. It is online registration with minimum and minimum documents for registration. It is not mandatory to register the firm to avail of tax benefits for the business.

A Proprietorship firm is also referred to as a sole trader. The businesses are unincorporated and have only a sole owner. It does not create a separate legal entity from the owner, i.e., the business and the owner.

The registration of a proprietorship firm consists of various types of registrations like Shop & Establishment act license, GST registration, MSME registration, etc. There is no compulsory business registration for sole proprietorship firms.

What is the Procedure of Sole Proprietorship Registration Online?

A proprietorship firm is known as a form of business organization where the business is owned and managed by a single person. Therefore, the business can operate under the name of the owner. The process for registration for a proprietorship firm is given below –

1. Apply for the PAN card

2. Select a name for the business.

3. The next step of the registration process is the opening of a bank account in the name of the business. Hence, all business transactions will be held through the current bank account.

4. The various registrations required for opting for a proprietorship firm are:

  • Shops and Establishment Act Registration –

The Sole proprietorship registration online is required to get the registration certificate under the Shops and Establishment Act of the respective state in which the business is situated.

  • GST Registration –

The sole proprietors must register for GST when the turnover exceeds the threshold limit prescribed in law.

  • Obtaining MSME proprietorship registration –

The proprietorship can also register as a small and medium enterprise (SME) under the MSME Act. For opening the bank account, the sole proprietor needs a mandatory document i.e., a Udyam registration certificate.

In case of the proprietor is doing business with food and related articles

In case of Sole Proprietor is performing the business of Import or export

  • Copyright –

In case you want to work on writing, literature, or artistic.

What are the Documents Required for Registration of Sole Proprietorship?

The documents required for the Sole proprietorship registration online are given below:

1. Self-attested copy of the Aadhar card of the Proprietor – The income tax return can only be filled out when the proprietor has linked his PAN with the Aadhar card.

2. Self-attested copy of the PAN card of the owner

3. Current Bank Account

4. Business office proof. E.g., Electricity bill and rental agreement, etc.

5. Passport-size photograph of the Proprietor.

6. E-mail ID and mobile number for communication purposes

How to Start a Sole Proprietorship in India?

One of the easiest types of business that anyone can start is a Proprietorship firm. You will need very few documents and minimal compliance. You need to go through some procedures to set up a Proprietorship business. The process of Sole proprietorship registration online is different from other businesses and without legal liabilities and taxations. The following points are noted for starting up your own business-

1. Choose a good business idea

2. Decide a name for your business

3. Make a current account with a bank

4. Go through the registration process and documents submitted as required

Features of Sole Proprietorship

A Proprietorship firm is a business whose ownership and management are in hands of a single person. Some of the key features of Proprietorship firm are as follows:

1. Individual ownership –

One person is the owner of a sole proprietary form of business. He is the one who brings the capital either through his private funds or by taking loans.

2. Risk bearing –

In this form of Sole proprietorship registration online, the proprietor is the sole beneficiary of profits and sole bearer of any losses incurred.

3. Management and control –

The sole proprietor is responsible for the management and control. He can employ a manager or other persons for this purpose.

4. Unlimited Liability –

The sole proprietor is the sole bearer of all the losses and is personally responsible for the liabilities of the firm.

5. Flexibility of organization –

In case of any changes in the business, the sole proprietor doesn’t need anyone’s permission and he can make changes without delay.

6. Life of business –

The business has no life of its own. It is dependent on the owner because the owner and business are the same in the eyes of law. Sole proprietorship registration online is a process conducted on the official portal of the government.

Explain the Merits and Demerits of sole proprietorship in India?

The followings are merits and demerits of sole proprietorship are as follows:

Merits of proprietorship firm –

  • Fewer compliances –

There is a minimum need for compliance that is required to obtain the formation.

  • Control of the business –

The sole proprietor has full control on the business

  • Seek minimal investment –

The business model of Proprietorship firm is a low-cost business idea

  • Attracts lower taxes –

The tax authority doesn’t treat the Proprietorship firm and sole Proprietor differently.

Demerits of proprietorship firm-

  • Unlimited liability –

He is personally liable for all the transactions in which he enters the business

  • No perpetual succession –

There is no guarantee of Sole proprietorship registration online means it can come to an end anytime if something happens to the sole owner taking care of the business

  • Difficult to raise funds –

It becomes difficult to raise funds because the sole owner is the only person who can invest in the business.

What are the examples of proprietorship firm in India?

The Best sole proprietorship examples in India are given for making money easily by starting your own business. The list of best proprietorship firm business Ideas for 2022 is given below:

1. Provide Home healthcare – Senior citizens can take advantage of this service.

2. Run a Bookkeeping business – Bookkeeping services are given to the financial interests and needs of other businesses.

3. Become a financial planner – These services are offered to individuals and small businesses. They help families plan for retirement.

4. Run a catering company – For weddings, corporate events and functions.

5. House cleaning services – They have low start-up costs.

6. Run a landscaping company – Take care of homeowners, businesses’ lawns, etc.

Conclusion

A proprietorship firm is the type of business easiest to start. Sole proprietorship registration online is taking various licenses as required by the organization. The Sole Proprietor is solely responsible for all the liabilities of the business. We have understood the registration of Proprietorship firm and the process of basic registration under the Shop and establishment act, GST registration, and Udyam registration. The sole proprietorship registration fee charged under government and professional charges are also minimal in comparison to the other business types’ registrations.