Sole Proprietorship
Sole proprietorship is a type of business which is entirely run by one person and in which there is no legal distinction between the owner and the entity. It is one of the oldest forms of business in India. The person who manages this type of business is solely and personally responsible for the debts.
Advantages
Process of Registration
There are generally no compulsory registrations required to be taken by the Sole Proprietor. However, following voluntary registrations may be taken if the owner wishes to expand the business:
1. GST Registration
2. Opening Current Account
3. Shop & Establishment
4. Trademark Registration
1. GST Registration
If the supplier is engaged in providing taxable intra-state supply of goods and services and the aggregate turnover exceeds the specified limit OR engaged in providing inter-state supply of goods or services OR wishes to take voluntary registration, he may register under GST. This gives the owner the benefit to avail loans, declare the turnover to have a record, avail credits and expand the business.
2. Opening Current Account
After getting the certificate of GST Registration, the Owner can get the Bank Account opened in the name of the sole proprietorship. Banks accept GST Registration Form and Number as a valid proof for opening bank account in the trade name of the proprietorship.
3. Shop & Establishment
Shop and Establishment Act is covered under state legislation and each state has its own rules and regulations for the same. Since rules are framed by the state government, they will differ from state to state.
All the shops, hotels, eating houses, restaurant, theatres, places of public amusement or establishment and any other commercial establishment etc. are covered under the Shop and Establishment Act and are required to obtain registration under it. Within 30 days of the commencement of establishment, registration under Shop and Establishment needs to be applied.
4. Trademark Registration
Trademark refers to brand or logo. It can also be obtained for a business name, distinctive catchy phrases, taglines or captions. Trademark Registration can help prevent repetition or duplication of goods or service by competitors or other persons. It also ensures that the investment put into the business and efforts are protected from unidentified sources.
Documents required for Registration
ID Proof
ID Proof of the Owner
Photograph
Passport Size Photograph of the Owner
Address Proof
Address Proof of the Owner
Utility bill
Utility bill for the premises
Rent Agreement
Rent Agreement of the Business Premises
No Objection Certificate
No Objection Certificate from the owner of the premises (if the premises is not owned)
- Who and why should you opt for it?
It is an idol form of business for any small-scale operator as they are saved from all kinds of legal formalities in every defined law. The ease of its operation and management also makes people opt for this form of business.
How StartUp Movers can help you?
HOW STARTUP MOVERS CAN HELP YOU?
- Registration under GST law
- Connecting with Empanelled bankers for bank account opening
- Registration under Shop & Establishment
- Trademark Registration
Quick Contact
Frequently asked questions
An attorney is not necessarily needed to help in starting a sole proprietorship. However, every business is unique and there might be incidences when guidance is needed on the functioning. An attorney may then be brought into picture for the necessary help.
Most local businesses and family businesses are preferably run as sole proprietorships apart from small traders and manufacturers.
The registrations under GST, Shop and Establishment and Trademark can be applied online.
Since there is no formal mechanism as per any law which defines the registration to be taken by a sole proprietorship, its existence needs to be established through tax registrations and other business registrations that a business needs to have. Hence, GST Registration can be taken in the name of the owner to establish the fact that he is operating a business as sole proprietorship.
Any Indian citizen can open a sole proprietorship. Registration may or may not be required depending upon the business planned to be established. Bank Account in the name of the proprietorship is generally required and Banks need GST or Shop and Establishment Registration Certificate for opening the same.
This type of business generally takes approximately 5-7 working days to open-up and get running. This simplicity makes it popular among small merchants and traders. It is also inexpensive to establish which makes it a widely used business structure.
The procedures have been defined for conversion of sole proprietorships into companies and partnerships.
Any person who has an idea of running a business needs only two things to run a business in India. A business name and a location of doing the business are those essential things to run a business in India.
