Understanding Sole Proprietorship:

As the name suggests, Sole Proprietorship is a business that is owned and operated by a sole entity, i.e. a single person. There are a few benefits associated with sole proprietorship that businessman can avail including easy to establish, helpful in penetrating the market in the unorganized sector, no registration (a sole proprietor firm is registered under other acts such as GST). However, it also comes with a few inadequacies which includes unlimited liability and limited existence.

Advantages of Sole Proprietorship:

It is easy to establish:

The basic requirement is GST Registration, procuring which, you can establish a sole proprietorship within 15 days.

It demands minimal compliance:

The only compliance that sole proprietorship has to follow is annual filing of their service, professional or sales taxes.

It is inexpensive:

It demands less expenses as compared to One Person Company (OPC). Also, as you have limited compliance to follow you may not require an auditor as well.

Dissolution is easy:

As compared to other business start up models, its easy & inexpensive to dissolve Sole Proprietorship company.

Economically viable:

Foremostly this is the only alternative, which provides maximum tax saving options & proprietor can opt for individual slab rate to compute its yearly tax. Therefore, it is economically feasible for small business mock-ups.

Disadvantages of Sole Proprietorship

Fundraising problem:

Investors & venture capitalist does not invest in this model as there is no option of share transfer in sole proprietorship company.

It’s not transferable:

You can’t sell or transfer a sole proprietorship company as all documents are formed with individual specific Pan card.

No Limited Liability Security:

Proprietor is directly responsible for any kind of business loss and there is no option to limit your liability.

Registrations & Licenses related to Sole Proprietorship Company

There are several registration & licenses which are necessary with registering of your company; it all depends according to the business model. For. e.g. FSSAI is compulsory if you are opening a restaurant business. Here are some basic registrations: –

  • MSME Registration
  • TAN Registration
  • GST Registration
  • Import Export code / IEC Code
  • FSSAI Registration/ Food License
  • Current Account/ Business Account
  • Shops & Establishment Registration
  • Labour License

Documents Required for registering a Sole Proprietorship Company in India.

Documents depends on whether the business is on lease or owned and if there is any necessity of license or registration. Though some basic documents are always required for registering a Sole Proprietorship company such as:

  • Latest Passport Size Photograph
  • PAN Card of Proprietor
  • Aadhar Card of Proprietor
  • Electricity Bill or Any Other Utility Bill for the Address Proof
  • Rental Agreement or Sale Deed of Business place

Facts you should know about registering a Sole Proprietorship company in India

  • It has only one promoter/owner who should be citizen of India. NRI And Foreigners can’t open a proprietorship company in India.
  • There is no minimum capital prerequisite for registering a Sole Proprietorship company.
  • For opening a current account in bank of a proprietorship firm requires GST registration and one of the registrations described above.
  • For safeguarding of brand name of proprietorship, one needs to take Trademark Registration separately.
  • On basis of the turnover, audit is applicable in proprietorship firm.
  • This is the best model for local sellers, small traders, food vendors & local grocery stores.
  • One can convert Sole Proprietorship to LLP/Private limited company. But it’s not recommended.

How ASA can help you to create Sole Proprietorship company in India

  • We deliver end to end consultation before you accept this model of creation for your start up. How taxes impact you, etc. We will absolutely guide you on registration & licenses which are required with this option, for example, MSME & Trademark prominence in registering an LLP Firm in India.
  • Also, we handle all the compliance work beginning from managing accounting work, GST return filling, income tax matters and annual audits if applicable.
  • We will constantly support you on all monetary needs of the organisation and assist you according to the requirement.
  • Generally, it takes 3 to 15 days procedure for registering this kind of business model & further it depends all on the authorities & requirements of client.

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    Our Services

    • ISO Registration/Certificate

      ISO certification helps your organisation to create credibility to further build overseas business.

    • GST Advisory

      A GST advisory helps the company to stay updated with the GST compliance filing process.

    • One Person Company

      This can be termed as an amendment to the sole proprietorship registration.

    • SSI/MSME Registration

      If you want a SSI/MSME license and afraid of long proceedings, leave everything on us. We help you without any hassle and paperwork.

    • NRI Income Tax Filing

      The tax accumulated from residents is the basis of Indian Economy. Section NRI Taxation under the Indian

    • Trust Registration

      We make sure to complete all the legal formalities required to form a trust under the jurisdiction of the state.

    • Partnership Firm

      We, help you in the process of Partnership firm registration with assurance of hassle free proceedings.

    • Trademark Registration

      We are there to help you with the entire process of Trademark registration