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Introduction to Sole Proprietorship Company Registration

Sole Proprietorship Registration is the process of registering a Sole Proprietorship company. Although there is no government or legal process for registering this type of business, you can take other government registrations such as MSME / SSI Registration, GST Registration or Purchase and Innovation Law License based on the type and suitability of your business.

What is a Sole proprietorship company?

If a person only runs the owner's company, that type of firm is called a sole proprietorship firm. Also, this type of business has a minimum compliance with another requirement and a small subscription fee. However, there is no official way to register a Sole Proprietorship company. Therefore, you may obtain additional government licenses and authorizations to prove the legitimacy of your business.

Key Features of Sole Proprietorship Firm

The key features of a single proprietary firm are the following:
  • Single ownership
  • Standard ownership
  • Unlimited debt
  • Not governed by any special law
  • Only one person owns all the profits and losses from the business
  • It is stressful to manage, grow and save money

Who Can Choose Sole Proprietorship Registration?

Anyone wishing to start a business with a small investment can go to this type of business model. You can start within 10-15 days. Also, all business control is in your hands only.
Advantages and disadvantages of Sole Proprietorship Firm There are many pros and cons including Sole Proprietorship Firm. Let's look at them one by one.

Benefits of Sole proprietorship firm

  • Can be installed by one person
  • Compliance requirements are very low compared to other types of businesses
  • It is not expensive to install this type of firm
  • Also, there is no need to pay any business taxes
  • Only one person is responsible for making decisions and managing the business

Individual Company Vs. Sole Proprietorship:

The evils of the Sole proprietorship company
  • The owner has a limited legal obligation. You are personally responsible for all the profits and losses of the firm
  • The business is on the verge of collapse if something happens to one owner
  • Also, it is difficult to raise a fund because only one person is responsible for all the work-related responsibilities
  • Sometimes the government also does not like this type of business and does not provide much support to them

Sole Proprietorship Registration Process

The registration process for a single proprietary firm is as follows;
Step 1: Finding the PAN
You need to apply to get a Permanent Account Number or PAN from the government in order to run your business.

Step 2: Name your business
You should always choose a name for your business that clearly explains the purpose of your business and is unique. Also, you need to be aware that the name you choose is not used by any other business.

Step 3: Open a current bank account and business registration
Then you need to open a current bank account in the name of your business. However, as there is no need for official registration, you can go and get other government licenses as per the legal requirements of your business.

Step 4: Registering under MSME
Although not required, you can go to MSME Registration or SME Registration under the Small, Medium and Medium Business Development Act, 2006. Registration under the MSMED Act may enable you to take advantage of government programs for such businesses.

Step 5: Obtaining GST Registration
You can also get GST Registration if your business profit exceeds the same limit in your case.

Documents are required

Documents required to register a single person are too small. For example;
  • Business area Utility Bill
  • Bank KYC documents
  • License issued by the Shops and Establishment Act
  • Details of Owner Income Tax Returns
  • Enter the address and proof of registered office
  • Bank account details
  • PAN card
  • Aadhar Card [1]

Although you do not need a direct registration of your only company to obtain these Government Licenses that can help you run your business easily:
  • MSME / SSI Registration
  • GST registration
  • Purchase and Inventory Law License

Compliance requirements of Sole Proprietorship Firm

As a single owner, you need to fully fulfill the following compliance requirements;
  • Submit annual income tax returns within the stipulated period
  • Also, you must enter GST Returns if you are registered under GST
  • In addition, you will also need to download TDS and file a TDS Return file if your business qualifies for Tax Audit
Conclusion
Land ownership is a type of factory in India that requires only one person as owner, manager and business owner. Such a person is the only one who is responsible for losses incurred in the company but is also entitled to a profit. Not to mention that the worst thing about this type of business is that the business is not separate from the individual. Additionally, any problem with the owner or the death of the owner jeopardizes the existence of the business.

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