Online sole proprietorship registration in india (2020) | Onfiling
For Indians

Sole Proprietorship

Overview

What is a Sole Proprietorship?

A Sole Proprietorship or Proprietorship is a type of enterprise which has no legal distinction between the owner and the business entity. It is owned and run by one person. A sole trader does not necessarily work 'alone'—it is possible for the sole trader to employ other people as an employee. A sole Proprietorship usually does not have to do incorporation or registration compliance. 

Who is a Proprietor?

The proprietor is the owner of all assets and responsible for all debts of the business. Trade can differ from the legal name of the sole proprietor and Proprietor may trademark his trade name. The Sole Proprietor is entitled to have all profits (subject to taxation specific to the business) and has unlimited responsibility for all losses and debts. 
   

The salient features of Sole Proprietorship are as under:

Single Ownership

A sole trading firm is owned by one individual with unlimited liability in which the proprietor is responsible for the management and capital requirements of the business.

Personal Organization or Common Identity

A Sole Proprietorship concern has no separate legal entity independent of the owner. The owner owns the business and he owes everything the business owes.

Capital

The capital is invested by the owner from his personal resources. Another option is to borrow money from his friends and relatives if he cannot depend solely on his personal resources.

Unlimited Liability

The liability of the Proprietor is unlimited. Dues of Business can be recovered from the personal property of the Proprietor in case the business assets are not sufficient to pay their debts.

One Man Control

Sole Proprietor is a one-man show. The sole trader provides management to the business. All the decisions, material procurement resources, employment of persons are controlled by the Sole proprietor. Also, he can delegate his duty to his/her subordinate if he wants.

Profits and Losses

The Profits earned from the business of the sole proprietorship belongs to proprietor and losses and risk are to be borne by him alone.

No Special Legislation

Sole Proprietorship is not governed by any special legislation.

Advantages

  • All profits belong to Sole Proprietor
  • Low start-up costs
  • Maximum secrecy
  • Establishing and operating business is simple
  • It’s easy to change your legal structure later if circumstances change
  • Easy winding up of business.

Disadvantages

  • Unlimited liability for debts
  • capacity to raise capital is limited
  • All the responsibility for making day-to-day business decisions is on Sole proprietor
  • Retaining and attraction of high-calibre employees can be difficult
  • All the responsibility for making day-to-day business decisions is on Sole proprietor
  • Taxed as a single person
  • Business has limited life
NAME SELECTION

Select unique name of your proprietorship business. Name should not trespass with others registered Trade Mark.

TAN NUMBER

Tan is required to be applied, because as per income tax rules, person is liable to deduct Tax deducted at source on payments of specified nature to any other person.

MSME REGISTRATION

To avail certain benefits of Govt schemes and benefits under MSME scheme, MSME registration is required.

Shops & Establishment Registration

It is mandatory for shops and the commercial establishments to obtain establishment registration with the Labour Department within 30 days of starting their business. It is mandatory for all states in India.

Trade License

To make sure that the citizens aren’t adversely suffering from hazard and nuisance by the improper carrying of trade practices hence, a License is necessary from the municipality within 30 days of starting the business.

Professional Tax Registration

State governments have passed specific legislation to impose a tax on profession, employment for calling of any nature, however, it can’t be more than Rs. 2500 per annum.

Goods and Services Tax (GST)

GST Registration is mandatory for each business engaged in providing services or supply of products, where the turnover exceeds Rs. 20 Lac or does even one transaction in an interstate trade.

Food License / FSSAI Registration

If you are in the business of producing, trading, storing or dealing in any manner of food items, then the state level FSSAI registration or Central License is mandatory based on the turnover.

Drug License

Retail Drug License is location-based and is issued by the State Government on the basis of certain norms and criteria. No entity can start or continue sale/trade of medicine without drug license.

Private Security Agency License

Private Security Agency may be a lucrative business with immense potential; however, it can be started or continued only after obtaining a license from the competent authority as designated by the state government.

Import Export Code (IEC)

IEC is a ten-digit pan based registration with the DGFT. IEC is a mandatory prerequisite to start a business of Import or Export in India. Only one IEC code can be issued against a pan.

FAQS

Yes, the proprietorship is often converted to LLP or Private Ltd Company.
PAN Card for the Proprietor along with identity and address proof is sufficient to start a Proprietorship and to obtain other registration, as applicable or required.
Yes, only one person is required to start a Proprietorship.
Yes, only an Indian Citizen can start proprietorship business. Similarly, no foreign funding is allowed during a proprietorship sort of business. However, an NRI or a Person of Indian Origin (POI) can invest in proprietorship with prior approval from the central government of India.
There is no certificate of registration or incorporation for proprietorship business as such. The legal identity of proprietorship as an entity is decided through various other registration or licenses obtained within the name of the proprietorship firm on the case to case basis. Similarly, each specific registration shall end in the issuance of a certificate of registration, for instance, GST Certificate, MSME Registration Certificate, Tan Allotment Letter, etc.
There is no limit on the minimum capital for starting a Proprietorship. Therefore, a Proprietorship is often started with any amount of minimum capital.
The Proprietor must be an Indian citizen and a Resident of India. Non-Resident Indians and Persons of Indian Origin can only invest during a Proprietorship with prior approval of the Govt of India.
There is no law which enforces registration of a proprietorship firm as such, We helps entrepreneurs in securing registration under MSME, GST, Shops & Establishment, etc. the MSME registration is done under Micro, Small and Medium Establishments Development Act, 2006 of Central Government.

List of Documents

  • NOC from the Owner of Premises
  • Two Colour Photograph
  • Valid Identity Proof of Proprietor
  • Proof of Registered Address
  • Cancelled Cheque
  • Self-Attested Copy of Pan Card
  • Latest Address Proof of Proprietor

Pricing Plan

BASIC ₹2500
One Time

  • TAN Registration
  • Udyog Aadhar Registration
  • GST Registration
  • ICICI Current Account Opening Assistance
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Get Plan

SILVER ₹2500
Quarterly

  • INCLUSIVE OF BASIC PACKAGE
  • 12 Months GST Return Filing(GSTR-1 & 3B)
  • Accounting & GST Eway bill Software
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Get Plan

GOLD ₹4250
Quarterly

  • INCLUSIVE OF SILVER PACKAGE
  • ITR-3 Return Filing
  • TDS Return
  • Bookkeeping & Accounting upto 800 entries
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Get Plan

PLATINUM ₹9000
Quarterly

  • INCLUSIVE OF GOLD PACKAGE
  • Payroll outsourcing upto 20 employees with all compliances
  • Bookkeeping & Accounting upto 2000 entries
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Get Plan

Disclaimer : 1) These packages are applicable where turnover is below Rs. 50 lakh in case of profession and Rs. 1 crore in case of business. 2) Business Current Account by ICICI Bank Limited. Subject to terms and conditions of ICICI Bank Limited.

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