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Proprietorship Registration

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Features of Proprietorship.

A sole proprietorship is a business type owned and operated by just one person. It is also referred to as proprietorship, solo entrepreneurship, or lone tradership.This is best suited for small business. In this business type, there is no legal distinction between the owner and the business entity. The sole trader can also employ other people to work in the sole proprietorship. All the profits generated through the sole proprietorship are subject to taxation with respect to the business. All the debt and assets of the business are the proprietor's liability. A sole proprietor can use trade names or business names other than their legal name.

Who Should Consider a Sole Proprietorship?

Anyone who wants to launch a firm in less time with significantly less capital may choose to register as a sole proprietorship. It can be launched in a few days and gives the owner complete control over the enterprise.

Why choose Sole Proprietorship.

Advantages

Disadvantages

Easy Setup and Low Cost: Establishing a sole proprietorship is straightforward, with minimal legal formalities and low startup costs.
Full Control: The owner has complete control over decision-making, allowing for quick and flexible responses to business needs.
Simplicity in Taxes: Income from the business is reported on the owner’s personal tax return, avoiding corporate tax rates and simplifying the tax process.
Direct Access to Profits: The owner keeps all the profits, as there are no shareholders to distribute them to.
Less Regulatory Burden: Sole proprietorships face fewer regulations and reporting requirements than corporations or partnerships.
Privacy: The business’s financial details are private, unlike corporations, which are required to disclose financial information.
Easy to Dissolve: If the business closes, dissolution is simple with minimal legal procedures or costs.

Unlimited Liability: The owner is personally liable for all business debts and obligations, which can put personal assets at risk.
Difficulty in Raising Capital: Sole proprietors may have limited access to funding and often rely on personal savings or loans, as investors prefer entities with limited liability.
Limited Life of the Business: The business’s existence is tied to the owner’s, so it may end if the owner becomes unable to run it or passes away.
Heavy Workload: Managing all aspects of the business alone can be overwhelming and lead to burnout, especially in larger operations.
Limited Growth Potential: A sole proprietor may find it challenging to scale the business, as resources, skills, and time are limited.
Difficulty in Attracting Talent: Without the ability to offer stock or significant benefits, sole proprietors may struggle to attract highly skilled employees.
Less Credibility: Some clients, suppliers, and lenders may perceive a sole proprietorship as less stable or credible compared to other business structures.

Eligiblity and Requirements to Register a Sole Proprietorship.

The eligibility criteria for sole proprietorship registration are :

The applicant should be above 18 years
The applicant should be an Indian Citizen
They should have the legal capacity to enter into a contract
The proprietor should not have any legal disabilities
Applicant should not be declared bankrupt or convicted for felony previously
The purpose of the business should be clearly outlined while starting a sole proprietorship
The business should be a lawful activity and should prevent selling illegal goods and services
The business should have a unique name that was not registered previously.

Documents Required for Sole Proprietorship Registration

Minimum Requirements for Registration

Aadhaar card of the sole proprietor
Permanent Account Number (PAN) card or any other identity proof of the sole proprietor
Bank account details in the name of the proprietorship
Address proof of the business
Rental agreement of the registered office address
NOC from the landlord
Electricity bill, Utility bill or sale deed in case it is a self owned property
MSME registration certificate
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GST number or GST certificate

Steps Involved In Sole Proprietorship Registration.

Step 1 : Register your Business Name

Consult our legal experts and choose a proper name for your sole proprietorship. Our team will assist you in registering your business name.

Step 2: Get your PAN, GST, and MSME Registration Done

Our team will help you get your Udyam registration certificate and GST registration done in one go!

Step 3: Filing for Sole Proprietorship Registration

Submit all the required documentation, and we will file the registration form for your sole proprietorship.

Step 4: Filling up Incorporation Form SPICe+ (Simplified Proforma for Integrating Company Electronically Plus)

After business registration we will assist you in opening an instant zero-balance current account. Our team also provides GST, ITR annual filing, and trademark registration support.

Why ComplyHub for Sole Proprietorship Registration

We provide access to top incorporation experts who will guide you through the complexities of sole proprietorship registration. Our professionals will coordinate with you to fulfil all your legal requirements. You can also track the progress on our online platform at all times. Our team will handle all the paperwork and ensure a seamless, interactive process with the government. We provide clarity on the incorporation process to set realistic expectations. With a team of over 300 experienced business advisors and legal professionals, you are just a phone call away from the best in legal services.