The sole proprietorship is the simplest form of business 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. The fictitious name is simply a trade name--it does not create a legal entity separate from the sole proprietor owner.
The sole proprietorship is a popular form of business due to its simplicity, ease of setup, and nominal cost. A sole proprietor need only register his or her name and secure local licenses, and the sole proprietor is ready for business.
The advantages of a sole proprietorship include:
The disadvantages of a sole proprietorship include:
One of the great features of a sole proprietorship is the simplicity of formation. Little more than buying and selling goods or services is needed. In fact, no formal filing or event is required to form a sole proprietorship; it is a status that arises automatically from one's business activity.
3 Basic Registration for starting a Sole Proprietorship Firm are as below:
Sole Proprietorship Registration process under Shop and Establishment Act
What is an Establishment?
Establishments included in this Act are commercial establishments, residential hotels, restaurants, eating houses, theaters, or other places of public amusement or entertainment.
Additionally, other establishments that the State Government may, by notification in the Official Gazette, declare to be an establishment for the purposes of this Act would then classify as establishments.
What is a Shop?
A shop does not include a factory, a commercial establishment, residential hotel, restaurant, eating house, theatre or other place of public amusement or entertainment;
To get the same registered under the Shops and Establishment Act. Here are the specific rules:
Submit an online application in the prescribed form to the Inspector within 30 days of starting any work in your shop/establishment. The application is to be submitted along with the prescribed fees and should contain the following information:
Sole Proprietorship Registration through Udyog Aadhaar under Ministry of MSME
An Udyog Aadhaar is a Unique identification number of 12digits provided by the Ministry of MSME for the small and medium enterprises. Udyog Aadhaar is highly advisable for the Sole Proprietors who don’t have an official government recognition helps a sole proprietor to get a unique identity and official registration with the Government of India that validates the existence of the business. The registration process for obtaining a Udyog Aadhaar is fairly simple, for the registration you do not need to get the form attested by any professional. We have to file online application and within 2working days it will get approved.
Sole Proprietorship Registration through GST Registration
GST registration is another way of getting your sole proprietorship registered. You can apply for GST registration if you are dealing in any kind of exchange of goods and services. It has replaced the old VAT and Service tax registration.
GST registration is a great method of getting an identity for your sole proprietorship concern. However, there are certain important considerations that must be evaluated before opting this method. Under GST registration, the only drawback is that after registration it is mandatory to meet all the compliances. Every registered business has to compulsorily collect the tax from the customers and file the GST returns.
If a sole proprietor has a Service turnover of more than Rs. 20 Lakhs, it is not mandatory for him to get registered and collect GST. Other than Service Sector sole proprietor if the turnover crosses 40 Lakhs then it is mandatory to get the registration.
Documents and Details required for the Registrations are as below:
Once the business is started, on the basis of the Nature of Business relevant Registrations to be taken, mentioned below are other Registrations.
If need any assistance in formation of Proprietary concern, please feel free to reach us at firstname.lastname@example.org or call us on 080-41633750 or 9880542668.