Sole Proprietorship Firm Registration can be done by simply following the procedure discussed in the current blog. These firms have the simplest registration procedure due to which people who are starting their business on a small level without having plans for expansion prefer such firms for their businesses. These firms do not have standard processes like corporate bodies for their registration neither they have any specific law like Companies Act of 2013 which governs them. In order to register a sole proprietorship you just need one person who is called as the proprietor of the firm.
Understanding Sole Proprietorship Firms
A proprietorship is a business performed and established under the name of a single person, and the registration of such a business is referred to as Sole Proprietorship Registration. It is intended for those who wish to operate their own businesses without having an impact from outside influences. Such entities do not even need to be registered. Proprietorship enterprises can be identified by their GST registration, MSME registration, or any other analogous registration. One of the primary distinctions between a sole proprietorship and a partnership is that sole proprietorships are easier to register than partnership firms.
Is it Mandatory to Register a Sole Proprietorship Firm in India?
If you are running your business in India as a proprietor without registering it then you are not doing anything against the law. It’s not mandatory to register your proprietorship firm under any law. There is no separate law that governs the registration of the sole proprietorship firm. But as a business expert we always suggest that you register your entity in any form you are running it. Similarly if you are running a sole proprietorship firm you should register it in order to recognize it widely. This will positively impact your business.
Method to Register a Sole Proprietorship
In order to register a sole proprietorship firm in India follow the criteria given below:
Choose a Good Business Location
If you suppose that you can operate your business from any place, you are misinformed. The location of your firm is essential to its success. If you want to see your business succeed, you must select a solid business site that meets your needs. This is the second and most crucial stage in forming a sole proprietorship. It is one of the key steps to register a sole proprietorship.
Choose a Good Name
The initial action to take is to come up with a nice name for the business that you run. After adopting a name, you need to decide whether it is distinctive or existing in use. Your name should be distinct and not infringing on any third party’s intellectual property rights. The company name must be well-researched because it will serve as your company’s recognition of something.
Collect all the necessary Documents
The following documents are required in order to register a sole proprietorship:
- Documents pertaining to the proprietor of the firm’s identity
- Address proof documentation for the firm’s proprietor
- Proof of the firm’s business address will be requested.
- Bank statements of the firm’s proprietor
- Utility bills such as a phone bill or a gas bill Details of previous years’ ITR return files, if any
Obtain GST and MSME Registration
Another alternative for registering a business in India is through MSME or Udyam Registration. A column of “Name of Enterprise” has been written in the MSME registration certificate, from which type of business can be recognized. As a result, if you register as an MSME, the certificate of udyam registration will automatically recognize you as the proprietor. It is the simplest approach to set up a sole proprietorship business in India. You can register as a proprietorship within a day via the MSME or Udyam registration.
Because there is no distinct form of sole proprietorship registration in India, registering GST allows one to register their sole proprietorship firm. If you have ever seen a goods and services tax registration certificate, you may have noticed that there is an option for “business constitution.” This option mentions the type of entity. As a result, if you want to register your entity as a proprietorship, it will be indicated in that column, and this is how proprietorship registration is done.
Get a PAN and TAN
The Aadhaar Card is crucial not only for humans but also for entities. As a result, in order to identify a sole proprietorship firm, the business owner must obtain an Aadhaar card for their organizations. The same is true for sole proprietorship businesses. They must also obtain an Aadhaar card with the assistance of the appropriate authorities. One of the most significant documents for all entities nowadays is the PAN Card. As a result, you must obtain a PAN Card for your sole proprietorship organization. The techniques for obtaining the same are available online.
Open a Bank Account
To keep business transactions transparent and simple, you should register a bank account in your proprietorship firm’s name. Following that, all firm-related transactions must be made through this account. This will assist you in controlling the company’s transactions and is quite vital for a variety of additional reasons. This is the last step to register a sole proprietorship.
Key Advantages to Register a Sole Proprietorship Firm
It is recommended to register a sole proprietorship in India because of the following advantages:
- Easy and simple registration procedure
- Less paperwork in comparison to the registration of the corporate bodies
- Less formalities in comparison to the registration of the corporate bodies
- Single individual can register it
- Decision making are quick and simple
- Management and oppression are in the hands of just one person which makes it less ambiguous
- Compared to other entities, there are fewer compliances.
- These are the low maintenance forms
- The proprietor is the single owner of the company.
- Entire profit is in the pocket of the proprietor of the firm
- There will be no profit sharing
- There will be no intervention in the company’s decisions.
- The entity’s essential choices are made by the proprietor.
- Proprietorships are easily transformed to other entities.
Conclusion
If your business is small and in a particular area without having any plan of expansion then you should choose a sole proprietorship firm for your business without any doubt. This has been suggested because such kinds of forms are low maintenance and best suit your business. Unnecessary wasting your money is of no use. Also the registration process of these firms is way more simple and effortless then the cor[porate bodies, but that does not mean it will not require expertise, definitely it will. Hence in order to register a sole proprietorship you can choose our excellent team of experts who will not only make your work easy but also provide you with guidance as per your business requirements.
