What is a Sole Proprietor?
About Sole Proprietor
A sole proprietor is a firm where a single person owns and manages the business. It is one of the earliest form of business in India as it does not have any rules and regulation to carry on the business. This is a prominent style of business adopted and being accomplished with less compliance and a low set up cost. The reason is that there is no separate law for governing sole proprietor business. There is no need for registration for sole proprietor business. The person can even open a bank account with whatever name they like to. This makes it very popular among the unorganized sectors, particularly the small merchants and the traders. So the best way to run the business with ease is to open a current bank account which makes it easy for the proprietor to have a clear check on the income and expenses, which would be difficult otherwise.
Advantages Of Sole Proprietor
Very few compliances : Sole proprietors can be
recognized only through their tax and government registrations. This makes their compliance limited to their
annual filings of professional taxes etc.
Starting the business : To start up the sole
proprietor it may take up to 15 days. All you need is to do the GST registration. PAN card, address proof,
ID proof are enough to get it done.
Low cost of set up : A sole proprietor is
inexpensive as compared to the One Person Company and due to its minimum compliance, even it makes it less
expensive. There will not be any extra expense to be spent on appointing the auditors etc. This is the
reason why people opt for it.
Audit not required : Here it is not required to have Audit Accounting.
Types Of Sole Proprietor Registration
A sole proprietor firm requires at least 2 proofs for legal entity. Following are the documents which are used as a proof:
- MSME registration
certificate along with chartered accountant business certificate
This certificate is applicable when the proprietor is doing his business only in one state and he expects a turnover of less than 40 lakhs
- GST Registration
certificate
You need to get registered under GST when your annual turnover is more than 40 lakhs. Anf also when you are doing online business i.e. selling through flipkart, amazon, etc.
Then you are required to get a GST number.
The following documents will be required to get the GST registration done:
- PAN Card, Aadhar card, photograph of the owner i.e. the proprietor
- Business place proof i.e. rental agreement, electric bill, etc.
- Bank statement copy
- License of Shop
and Establishment Act
It is not mandatory to have Shop and Establishment license. It may be required as per the local laws, which is issued by the municipal party as per the number of employees.
List Of Documents Required
- PAN Card copy of proprietor
- Aadhar card of the proprietor
- Current Bank Account
- Registered office proof
Corporate Entity Registration
Proprietorship Registration
MSME or SSI
Registration
Import Export
Registration
Trademark
Registration
