Know The Necessary Details About Sole Proprietorship

A Sole proprietorship is one of the easiest forms of business that can easily be done in India. It does have its pros and cons which will be discussed in this article. This article will help you with the basic information you need to form a base idea in your mind in case you are planning to start up with a sole proprietorship business.

A Sole proprietorship is an easy way of doing business because there are minimal compliances required to run business which can be easily fulfilled.  There’s no legitimate legal registration of a sole proprietorship business but rather it gets its recognition through other registrations. Following are the things you had collectively require to prove the existence of your sole proprietorship directly or indirectly or with inter-relation between the following documents as one would be needed for others. Starting with the list and explanations below:-

• Aadhar card
• PAN card
• Bank account
• Proof for your registered office.

List of few Registrations to run sole proprietorship smoothly:-

• Small or medium enterprises or SME registration.
• Get a shop and establishment license.
• A GST registration.

Now let’s learn each document in detail below with explanation and how to get them.

1. Aadhaar Card:-Aadhaar card has an identification number which now a mandatory document to have by all the citizens of India. It is used for applying for any registration in India. It’s used even for the filing of the income tax return. Rather in order to file your income tax return, you need to link your Aadhaar card with your PAN card. You may get one by approaching E-Mitra orAadhaar Seva Kendra if you are yet to have an Aadhaar number of your own, apply for one at the earliest and you will be registered for it and get a hard copy in 15 to 20 days.
2. PAN card-You can’t file for an income tax return without a PIN number. You can get your PAN card by registering for it online and the fees for application is Rs 110/- approximately The form can be submitted online by verification through Aadhaar number as E-KYC. You may get your PAN number in 7 to 8 days time.
3. Bank account-When you have your Aadhaar number and a pin number, you may visit a bank now to get yourself a bank account, now this one could be difficult to get in case you want one for the transactions for your business as sole proprietor. Reason being lack of specific registration for it. But none the less, you may have a bank account opened up anyway. Now if you want to open up a current bank account, you might need to submit a GST registration document to the bank officials as well.
4. Proof for your registered office-In case you have your office on your own property, you should have your ownership papers of property and copy of utility bills in your name ready as proof. However, if you have your registered office for sole proprietorship business on a rented property, then you shall have a NOC document as well as a copy of the rental agreement with the landlord.

Following required to establish the existence of your sole proprietorship are as follows-

• MSME Registration

You may get yourself registered under the small, medium enterprises under the MSMED Act^[1]. The application can easily be filed online. It’s not really a compulsory registration to be done but it’s highly recommended to get its registration because of the benefits aspect of it. You may take advantage of the multiple schemes the government offers time to time in order to promote these industries as they prove to be a great source of economic development.

• Shop and establishment license

Not really a mandatory document at all but could be something to be issued by the municipal corporation according to the law that’s local to the region of your business operations. It’s issued based on the number of employees you had have. But you will be the only member being a sole proprietor.

• GST registration

You may get yourself a GST registration in case your annual turnover exceeds the amount of Rs. 20 lakhs. Or just get a GST registration voluntarily. You will require the above-mentioned list of documents as key documents for GST registration. You can easily apply through the online GST registration portal provided by the government. You will get your GST registration certificate within a few days only.

And this how you can easily set things up for your sole proprietorship registration in India. Along with the advantage of shutting it down easily whenever you want. For more details, you may contact Swarit Advisors anytime 24/7 hr on our helpline number.

Also, Read: Does Sole Proprietorship Business require Registration?