Your Sole Proprietorship
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What is Sole Proprietorship Registration?
All you need to know
Due to its simplicity, ease of creation, and low cost, the sole proprietorship is a common business structure. All that is required to get started is for the sole owner to register his or her name and obtain the necessary municipal permits. The one-person business is not a recognised legal entity. It merely designates a person who is the company’s owner and liable for all of its debts. A sole proprietorship may conduct business under its owner’s identity or a fictional name. The false name is just a trading name; it doesn’t establish a separate legal entity from the sole proprietor owner.
In India, establishing a sole proprietorship business is a reasonably simple process that doesn’t call for any paperwork or registration. A business licence must be obtained in accordance with the state’s or the federal government’s requirements. Furthermore, it is preferable to register a trademark if the company name is distinctive.
Before setting up a proprietorship in India, a potential proprietor must be aware of the laws and regulations governing the venture they want to launch and secure the requisite permits. For any permit, from the relevant Local, State, and Central Government authorities.
Compliance required by Proprietorship firm
All you should know about compliance of Proprietorship firm
GST Registration
One approach to complete a proprietorship registration is to register for GST. It establishes a business’s legality as a provider of services or goods. 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.etc.).
GST Return
The monthly, quarterly, and annual GST returns must be filed by sole proprietorship businesses that are registered under the GST. A GST return is a document that includes information about the taxpayer’s revenue. Due to the fact that all registered taxpayers, including partnership firms, are required to file GST return
MSME registration
Under the MSME Act, you can register 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. Additionally, registering for an Udyam Aadhar card will be highly advantageous.
Accounting
Since the owner is regarded as being inseparable from the business, a sole proprietorship does not require a separate set of accounting documents. However, it is always advisable to keep track of a proprietorship firm’s commercial activities so that you may determine whether these operations are profitable.
IT Return
Every sole proprietorship with taxable income above the exemption level is required to file income taxes. A tax audit might also be required in specific circumstances. The process for submitting a proprietorship’s income tax return is similar to that of filing an individual income tax return because a proprietorship is thought of as being one and the same as the proprietor.
Tax Audit
A sole proprietor is not required by law to obtain the accounts until their proprietary business’s annual turnover exceeds 1 crore rupees and their annual gross receipt from their profession exceeds 50 lakh rupees. In both situations, an owner is required by the Income Tax Act to undergo an accounting audit.
Cost for Sole Proprietorship Registration
Choose Your Package
ULTIMATE
(All Inclusive)-
SSI/MSME Registration
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GST Registration
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Accounting and Book-keeping (up to 500 transactions)
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Income Tax filing upto turnover of Rs. 50 Lakhs
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GST Returns for one year (GSTR 3B and GSTR 1)
Documents Required for Proprietorship
Quick Checklist
- Photograph
- PAN Card
- Aadhar Card
- Electricity Bill or any other utility bill for the address proof
Key features of Sole Proprietorship Firm
Points to make your decision easy
Decision Making
Control over all business decisions remains in the hands of the owner. This ensures quicker business decision making and hence, faster execution. Owners have complete and direct control over all decision making.
Easy To Start
The registration process for starting a sole proprietorship firm is very easy compared to other business structures. One can get Registration Certificate within 1 working day. Obtaining a GST registration is also very quick and easy.
Easy to close
The dissolution or sale of the Proprietorship firm is very easy. As there is no legal distinction between the proprietor and the proprietorship firm, not much regulatory formalities are required for closing of a proprietorship.
Tax benefits
The owner of a sole proprietorship is not required to file a separate business tax report. The business will be taxed at the rates applied to personal income, and not corporate tax rates. This means huge tax savings.
Self employment
The owner of Proprietorship firm, himself is self-employed and this creates various employment opportunities. Also because the owner is in the hands of a single person, there are fewer chances of leakage of business secrets.
Inexpensive
A Sole Proprietorship registration is inexpensive as compared to all other forms of organizations. Also on account of the minimum compliance requirements, it proves to be an advantage as it is inexpensive even in long run also.