Sole Proprietorship Registration: Best option for those who are looking for traditional, small street side businesses may register Sole Proprietorship. Start business today & get...TAN, GST, MSME, IEC, PF, ESI, Bank A/c Support & GST Software along with your Certificate.

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Proprietorship Vs OPC Company

Sole Proprietorship Firm:

The sole proprietorship is the simplest business form under which one can operate a business. The sole proprietorship is not a legal entity. It simply refers to a person who owns the business and is personally responsible for its debts. A sole proprietorship can operate under the name of its owner or it can do business under a fictitious name, such as ABC Enterprises. The fictitious name is simply a trade name-it does not create a legal entity separate from the sole proprietor owner. The words LLC, Inc, PJSC, GMBC, PTE LTD, PVT LTD & LTD are not allowed to be used at the end of the Sole Proprietorship firm's name. Certain words are prohibited in the by law, one can refer Prevention of Names and Emblems Act.

Sole Proprietorship Firm registraton is not mandatory, with out registration also, you can run the business but to open a current banking account, the banker may insist you to get it registered and hence registration is essential. There is no particular office where you can register your busines, you can register it under GST as trader or supplier of services, Shops & Commercial Establishments as commercial establishment and MSME as MSME entitiy. No separate PAN is allotted as the individual PAN is used for Income Tax purpose. However, a Tax Deduction and Collection Account Number (TAN) will be issued separately.

To register a Sole Proprietorship, there should be an Individual who should attain the age of majority. Most of the Traditional, Street side businesses are established as Proprietorships in India. Establishing a Sole Proprietorship is easy and much cheaper than One Person Company.

Who shall register a Sole Proprietorship Firm: Those who are looking for traditional, small street side businesses may register Sole Proprietorship.

One Person Company or OPC Company:

The concept of One Person Company was introduced in the Companies Act, 2013 with an intetion to provide limited liability to the individual enterpenuers with an innovative technology business ideas. One Person Private Limited Company will enjoy the same benefits of a normal Private Limited Company. An individual who does not have the co-founder to start his business venture may incorporate One Person Private Limited Company and enjoy the benefits available under Companies Act, 2013. An individual who wants test his business idea may start OPC Company and once the project is viable, he can approach the Venture Capitalists and get the investment into equity sharecapital and convert into a normal Private Limited Company.

Who shall register OPC Company: An Individual with an innovative business idea who is looking for venture capital fundings, external investment, long term expansion and growth and an individual who wants to enjoy the limited liability.

Why Should I register a Sole Proprietorship Firm

Below are the main reasons to register a Sole Proprietorship Firm.

Low Cost of Formation:

The Proprietorship Firm can be formed with low cost and simple documentation where as the One Person Private Limited Company incurr lot of cost at the time of incorporation. Digital Signature Certificate is not required to registar a Sole Proprietorship Firm. The annual compliance cost is much cheaper than that of One Person Private Limited Company. A Sole Proprietorship Firm is not required to submit or file any documents with the Registering Authority on an annual basis. It has to file applications whenever there is a change in the particulars of the business. Sole Proprietorship Firm registraton is not mandatory, with out registration also, you can run the business but to open a current banking account, the banker may insist you to get it registered and hence registration is essential.

Tax Audit:

Income Tax Audit is not required for a Sole Proprietorship Firm if the turnover of the Firm does not exceed Rs. 1 Crore in a financial year and Rs. 2 Crore in case of presumtive income scheme. For a Sole Proprietorship Firm, the Individual Income Tax Rates prevailing for the time being are applicable. There is an opportunity for income splitting, an advantage of particular importance due to resultant tax savings. The following table illustrates the Income Tax Rates applicable to a Sole Proprietorship Firm:

Income Tax Rates for a Sole Proprietorship Business:

You can download it here Click Here or you can view herein below:

Flexibility, Ownership, Cotrol & Privacy:

The Business of a Sole Proprietorship can be changed as per the wishes of the Proprietor of the firm. The proprietor may appoint Manager to manage the business affairs, he can hire employees, supply goods and services. He is not answerable to any other person. He is the whole and sole owner of his business, he is not required to report someone else. He can oparate bank account in Individual capacity. Unlike a Company or other business entity, a Sole Proprietor has a full conrol over decision making of business transaction and it is vested in the hands of Proprietor of the firm and the financail information of the business can not be accessed by third parties. In a Company, the financials can be easily accessable on MCA web portal.

Sharing of Profit:

The Proprietor can enjoy surplus revenue as he is whole and sole owner and he does not have any partners in his business. He can reduce his tax burden as he pays the tax in slab rates applicable at the payment of Income Tax. He can claim more deductions under Chapter VI of the Income Tax Act. He can also claim Income Tax Rebate of Rs. 12,500/-.

Where Should I Register My Sole Proprietorship Business

There is no specific government department prescribed for registration of a Sole Proprietorship Business. But based on the nature of business and turnover levels, it may be registered in the following departments. The banker will accept any two certificate of registrations for opening a Proprietorship Current Banking Account.

You can register your Proprietorship business in the following departments:

  • 1

    MSME Registration

    MSME stands for Micro, Small and Medium Enterprenuers. The Government of India clearly defined what is Micro, Small & Medium Enterprise. Any business entity falling under these limits can apply for registration under MSME Act. A Sole Proprietorship business can also make application under this department and get the Certificate of Registration. This certificate is alos called as UDYOG AADHAR or UDYAM REGISTRATION.

    MSME Threshold Limits:

    Classification Investment Limit Turnover Limit
    Micro Less than INR 1 Crore Less than INR 5 Crore
    Small INR 1 to 10 Cror INR 1 to 25 Crore
    Medium INR 10 to 50 Crore INR 25 to 250 Crore
  • 2

    GST Registration

    Goods and Services Tax (GST) is an Indirect Tax (or Consumption Tax) imposed in India on the supply of goods and services. It is a comprehensive multistage, destination based tax. Comprehensive because it has subsumed almost all the indirect taxes except few, multi-staged as it is imposed at every step in the production process, but is meant to be refunded to all parties in the various stages of production other than the final consumer and as a destination based tax, as it is collected from point of consumption and not point of origin like previous taxes.

    GST is applicable for the business entities whose turnover is above Rs. 40 lakhs* in a year (Rs. 10 lakhs for north eastern states). A small business entity (ie. with a turnover is below Rs. 1.5 crores (Rs. 75 laksh in North Eastern states)) can opt for GST Composition Scheme for lowering the GST.

    Goods and services are divided into different tax slabs for collection of tax - 0%, 0.25%, 1%, 1.5%, 3%, 5%, 6%, 12%, 18% and 28%. However, petroleum products, alcoholic drinks, and electricity are not taxed under GST and instead are taxed separately by the individual state governments, as per the previous tax regime.

    The tax came into effect from July 1, 2017 through the implementation of One Hundred and First Amendment of the Constitution of India by the Indian government. The tax replaced existing multiple taxes levied by the central and state governments. The tax rates, rules and regulations are governed by the GST Council which consists of the finance ministers of centre and all the states.

    A Sole Proprietorship business can also apply for registration under this Act and get the Certificate of Registration.

  • 3

    Shops & Establishments Registration

    Every employer and owner of a shop & establishment whether it is Sole Proprietorship, Partnership Firm, LLP, Private Limited Company, Public Limited Company or any other business entity registered under any other law for the time being inforce shall apply for registration under Shops & Commercial Establishments Act within 30 days of commencement of business. The Shops & Commercial Establishments Act regulates hours of work, payment of wages, leave, holidays, terms of service and other conditions of work of persons employed in shops, commercial establishments, establishments for public entertainment or amusement and other establishments. This registration is compulsory for every business place of work except those who falls under Factories Act 1948. It is a state regulation and each state has separate shop & establishment regulation.

  • 4

    IEC Registration

    Any business entity except (Ministries / Departments of Central or State Government and persons importing or exporting goods for personal use not connected with trade or manufacture or agriculture), which imports or expors any goods or services, it needs to have Import Export Code (IEC). IEC is a 10 digit code, issued by the office of the Director General of Foreign Trade (DGFT), DGFT is set up under the Ministry of Commerce and Industry, Government of India. Each state has it's jurisdictional office.

  • 5

    FSSAI Registration

    An individual or a restaurant, hotel or any business entity who trade, supply, sell, manufacture food has to take FSSAI registration. Food Safety Standards Authority of India (FSSAI) is the governing body regulated under Food Safety and Standards Act, 2006. Before starting a food business, a business entity has to take a 14 digit FSSAI license number under Food Safety and Standards Act. There are three categories of FSSAI License:

    Basic License:

    Basic License is applicable for the food business whose annual turnover does not exceed Rs. 12 lakhs in a financial year.

    State Registration

    State Registration is applicable for the food business whose annual turnover is from Rs. 12 lakhs to Rs. 20 crores in a financial year.

    Central Registration

    Central Registration is applicable for the food business whose annual turnover is above Rs. 20 crores in a financial year.

    Who are not required to take FSSAI Registration?

    A petty manufacturer who himself manufactures or sells any article of food or a petty retailer, hawker, itinerant vendor or a temporary stall holder or small scale or cottage or such other industries relating to food business or tiny food business operator; but they shall register themselves with such authority and in such manner as may be specified by regulations of FSSAI, without prejudice to the availability of safe and wholesome food for human consumption or affecting the interests of the consumers.

  • 6

    IPR Registration

    What is Trade Mark?

    A trademark is a word, phrase, symbol or design that identifies and distinguishes the source of the goods of one party from those of others. A service mark is a word, phrase, symbol or design that identifies and distinguishes the source of a service rather than goods. Trademark is the valuable asset of each company as it is linked to their products and consumers can decide to buy products just based on the trademark. Therefore, trademark must be distinctive for each company so that consumers can distinguish a specific product of a company from others. A trademark is a marketing device that visually sets a company or product apart from similar items trying to gain market share. Trademarks are forms of intellectual property that are unique to a company and or its products. Slogans, symbols, or inventive catchphrases are common examples of trademarks. The purpose of trademark law is to prevent unfair competition by protecting the use of a symbol, word, logo, slogan, design, domain name, etc. that uniquely distinguises the goods or services of a firm.

    Who should register Trade Mark?

    The inventor of a word, symbol, logo, slogan, desing, domain name can apply for trademark with the Office of Controller General of Patents Designs and Trademarks. An individual not doing any business is also eligible to file a trademark application and obtain trademark registration for a word or symbol that is proposed to be used by him/her in the future. There are four trademark offices are located in India they are Delhi, Mumbai, Kolkatta & Chennai. You can apply for trademark online aswell as offline.

    What is the fee for Trade Mark registration?

    Enterprises Physical Filing Online Filing
    Where the applicant is an Individual/Startup/Small Enterprise Rs. 5,000/- Rs. 4,500/-
    In all other cases Rs. 10,000/- Rs. 9,000/-

    How long does a Trade Mark registration take?

    Trademark Registration is a lengthy process and it takes around 12-24 months to obtain registration in a straight-forward case, without any objections or oppositions. However, the trademark application number is usually generated on filing for it.

    What are the documents required for Trade Mark registration?

    1. Incase of individual, id and address proof & authorisation letter.
    2. Incase of other than individual, Certificcate of Registration, Startup Certifiate or MSME certificate & Authorisation Letter.
    3. Logo if any.

How to Register a Sole Proprietorship Firm

In India, there is no particular government department is specified to register a Sole Proprietorship Business as Sole Proprietorship business registration is not mandatory. Generally, the bank instructs the proprietor to provide any two certificate of registrations for opening a Current Banking Account for his Sole Proprietorship Business. And hence, the Proprietor may register his/her business any one of the government department. It may be registered under any government department as such GST Department, Labour Department, Director General of Freign Trade, Food Safety and Standards Authority of India or such other department. We suggest proprietors to register his/her business based on thier nature of business and expected turnover limits. You can find below the Documents required and Step by Step Proprietorship Registration Process.

Documents Required

  • A

    Proprietor Documents

    1. Proprietor PAN
    2. Proprietor ID Proofs
      Aadhaar Card or Voter ID or Passport or Driver's License
    3. Proprietor Address Proofs:
      Aadhar Card
      Voter Id
      Driver's License.
    4. Proprietor latest passport size photograph
    5. Proprietor Email ids
    6. Proprietor Mobile Numbers linked with their Aadhar
  • B

    Office Address Documents

    1. Registered Office Address Proof: Latest Power Bill
    2. No-objection letter from the Landlord.
    3. Rental Agreement from the landlord if the premises are rented.
    4. Proprietorship Firm email id.
    5. Office Name Board both in English and Regional Language.

3 Step Proprietorship Registration Process:

  • 1

    Preparation of Documents

    Through CompaniesHouse- One Hour Job

    We will prepare all documents for online submission.

  • 2

    Online Submission

    Through Online - One Hour Job

    We will upload the documents online with the Government web portal and pay the requisite fee if any.

  • 3

    Certificate of Registration

    Through online - 3 to 7 Day

    After scrutiny, the Officer will approve the form and issues you the Certificate of Registration through online.

What All You Get

  • Certificate of Registration
  • Tax Deduction & Collection Account Number
  • Shops & Establishments Registration
  • GST Registration
  • Import Export Code
  • PF Registration
  • MSME Registration
  • Trademark Registration
  • ESI Registration

What Next Once the Firm is Registered

Every Proprietorship business has to comply the law. The following are the annual compliances which are required to be filed by the Sole Proprietorship.

Proprietorship Business Compliance

Let's Clear Your Doubts

Who will register a Sole Proprietorship Business?

Those who are looking for traditional, small street side businesses may register Sole Proprietorship.

Is registration of a Sole Proprietorship mandatory?

Not mandatory. A proprietorship business may be run without registration.

Can an NRI or a Foreign national register Sole Proprietorship?

Yes. But his presence should be there in India at the time of Registration.

Is there any minimum capital required for registering a Sole Proprietorship?

No minimum capital is required.

Can I start a Sole Proprietorship Business from my home?

You can start.

What is the duration for Proprietorship Registration?

3 to 7 working days.

What is the Government fee for Proprietorship Registration?

The fee varies from State to State in India. Normally, It ranges from Rs. 1000 to Rs. 3000.

Can I register my Firm on my own?

Yes, you can but an advoate attestation is required on the application forms. It is advisable to approach a consultant like us before making application for firm registration.

Can a minor start Proprietorship Business?

No. He or she should be a major.

Register your Sole Proprietorship with us for less! Start here & Save! Contact Now!

Get TAN, GST, MSME, IEC, PF, ESI, Bank A/c Support & GST Software along with your Certificate!