Why Sole Proprietorship Is Popular In India?
Sole proprietorship is a popular form of business now days and many business entrepreneurs prefer them
over other forms of business because of the following reasons –
Sole proprietorship is one of the oldest and simplest business structures that a business owner can
handle single handedly.
Simple business form to start with and close.
Flexibility in carrying out business activities.
Very economical as compared to other forms of business entity.
It has minimal compliance requirements.
You are the only decision maker – Not answerable to anybody and independent to give instructions
No tension of sharing income & profits with anyone.
Only you are responsible for the profits you earn and losses you incurred.
Common Registrations For Sole Proprietorship
A legal authenticity of a sole proprietorship is established after getting various registrations & licenses. Some
of the common registrations obtained by a sole proprietor are as follows –
Sole proprietor needs to obtain Udyog Aadhaar or MSME Registration online within the business name in order to give legal authentication to his/her sole
If goods or a service sold/provided by the proprietor crosses the GST turnover threshold registration limit, it becomes necessary for the sole proprietor to apply for GST registration
GST registration for traders – It is mandatory for the sole trader to obtain GST registration when the
annual turnover of goods exceeds Rs.40 Lakhs annually.
GST registration for service providers – It is mandatory for service providers to obtain GST
registration when the annual turnover of services exceeds Rs.20 Lakhs
When sole proprietor make salary payments to their workers on which TDS deduction is required, it is
necessary for him to obtain TAN from the income tax department.
When sole proprietor is involved in a business of selling or handling of food products, it becomes mandatory
for him to obtain FSSAI registration
Import Export Code Registration
If sole proprietor is engaged in the business of import and export of goods to/from India, it is necessary for
him to obtain import export code from DGFT within their
Bank Account Opening For Sole Proprietorship
You must have PAN card and Aadhaar number in order to open bank account for sole proprietorship. If you
are having both these documents, you can visit any bank to open your bank account. In addition to these
documents, you must carry identity and address proof at the time of visiting bank. It is necessary to submit
GST registration document to the bank officials at the time of opening current account.
Documents Required For Sole Proprietorship Registration
There are various documents which you need to submit in order to get yourself registered as a sole
Latest passport size photograph – Submit a latest passport size photograph. Photograph should be
recent with a clearly visible face.
Aadhaar number – Aadhaar card is a 12 digit unique number provided to all Indian residents for
verification of their identity. Now days, Aadhaar number is the basic requirement in any type of
registration in India. If you are not having Aadhaar number, visit your nearest Aadhaar seva Kendra to
obtain a new Aadhar card number. When you apply for Aadhaar card number, it will be delivered to
you at your home address within 15-20 days.
PAN card – PAN card is the most useful document needed to file tax returns to the income tax
department. If you are not having PAN card, apply for it now. You only need to submit e-form,
photograph, identity proof and address proof to apply your PAN card. Bank account – As a sole proprietor, it is important for you to open a bank account for sole
proprietorship registration. Any document can serve your purpose: a cancelled cheque from your
personal bank account or bank statement or passbook front page.
Registered office proof – As a sole proprietor, you need to provide your registered office proof at the
time of sole proprietorship registration –
If your property is rented, you need to submit rent agreement and NOC from the landlord
If your property is self-owned, you need to submit electricity bill or any other address proof of the
Advantages Of Sole Proprietorship
There are various advantages that a sole proprietorship offers to a business owner –
This form of business is easy to start and manage.
It is owned, controlled and managed by a single person.
Business control and decision making is to be handled by a single person only.
This form of business is less expensive to start with in comparison to others.
A sole proprietor has few formalities and minimal compliance requirements.
You don’t have to do corporate tax payments as a sole proprietor.
There is no problem of sharing profits as single person is operating and managing the whole