Explore all the details you need about Proprietorship Registration, tailored for your needs.
Sole proprietorship is one of the oldest and simplest business structures to start in India. A proprietorship is owned and operated by a single individual, with minimal compliance requirements.
Since the proprietor and the business are the same entity, a proprietorship cannot have partners or shareholders. Furthermore, the proprietor has no limited liability protection for business activities conducted within the proprietorship. This business structure is ideal for small businesses with fewer than 5 employees.
Solocorp Verifocus Legal LLP offers professional support for registering your Sole Proprietorship in India. Our streamlined process helps you set up your proprietorship firm quickly and hassle-free. Start your Sole Proprietorship registration with us today and bring your business ideas to life.
In India, Sole Proprietorship registration does not follow a standard government registration process. Instead, it is formalized through tax registrations required by law. A key tax registration is the GST (Goods and Services Tax) Registration, which must be completed under the proprietor's name to validate the proprietorship status. This registration signifies that the proprietor is legally conducting business as a sole entity.
To operate a proprietorship in India, you need to obtain certain licenses and registrations, including:
Sole Proprietorship registration does not involve complex formalities or dissolution procedures. However, the proprietor may still need certain registrations and licenses to comply with legal requirements in India.
Proprietorships typically only need to be registered with Income Tax and GST departments, minimizing compliance requirements compared to LLPs or Companies, which require additional filings with the Ministry of Corporate Affairs.
With no partners, shareholders, or directors, the proprietor can manage the business with minimal documentation and fewer formalities.
Since all decisions are made by the proprietor, there is no need for consent from other parties, enabling quick decision-making for the business.
The proprietor retains complete control over assets, revenue, expenses, and all aspects of the business, providing flexibility and autonomy.
Proprietorships rely entirely on the proprietor’s personal savings, borrowings, and credit. As no external partners are involved, securing funds from financial institutions can be challenging.
In a sole proprietorship, the proprietor is personally liable for business debts. Personal assets may be at risk if the business faces financial difficulties.
If the proprietor passes away or becomes incapacitated, the business ceases to exist, and there is no continuity in operations.
Proprietorships face constraints on raising capital, assuming liability, and business continuity. This limits their growth potential compared to larger entities.
Sole proprietorships are not incorporated, meaning there is no centralized database to confirm their operational status. This often categorizes them as unorganized businesses.
Proprietorship firm registration can be completed quickly and efficiently through Solocorp Verifocus Legal LLP. For registration, only the PAN and Aadhaar card of the proprietor are required. Solocorp Verifocus Legal LLP helps you secure your registrations, including GST and a Zero-Balance Business Current Account with LEDGERS Accounting Software, all within 15 days.
Log into LEDGERS using your email address for payment.
Navigate to the Services tab and select the Proprietorship Engagement option.
Upload copies of your PAN and Aadhaar cards.
Our registration expert will submit the application for GST registration and assist in opening a current account with the bank.
Use LEDGERS Accounting Software for GST invoicing, filing, and other business services.
A proprietorship can undertake any type of business activity that an Indian person can undertake across most sectors and industries. However, there are some activities like banking, insurance, financial services, lending, defence, and telecommunication that require specialized approval. In such cases, a company is mandatorily required to obtain various approvals from the Government. Hence, the proprietorship business structure only works for business activities that are small-scale in nature. This might be one of the limitations of the proprietorship firm registration.
The following are some of the compliances that are applicable for a sole proprietorship registration:
The business owner of a proprietorship will have to file a personal income tax return using the form ITR-3 or ITR-4.
Only income tax forms ITR-3 and ITR-4 allow for declaring business income. Hence, all proprietorships will have to file form ITR-3 or ITR-4 to be compliant with the income tax regulations.
If a proprietorship has GST registration, GST return must be filed every month and quarter as per the scheme under which the business is registered.
In case the proprietorship is having employees or purchasing goods/services beyond a certain threshold - tax must be deducted at source and TDS returns must be filed every quarter.
In addition to the above, various other compliance requirements may be applicable to the proprietorship based on industry and location.