The most popular type of business registration for small business owners is a proprietorship. With little money and little effort, one can easily start a proprietorship registration. Many business owners wonder how to register a proprietorship firm, what steps must be taken, and which paperwork must be submitted in order to begin the registration process. You will gain a solid understanding of the idea, steps, paperwork, and features required to begin a proprietorship registration after reading this article.
What is Sole Proprietorship
A sole Proprietorship is a business entity that is owned and managed by a single individual who also has full authority and accountability for the entire company. The main reason for starting this form of company enterprise is that the proprietor can keep all the earnings while also being personally responsible for any losses. The best entrepreneurs in this kind of business are those with a small product market and a simple industry.
Procedure To Register a Sole Proprietorship
The steps to incorporate a sole proprietorship company are as follows:
- Keep a name for the sole proprietorship business.
- The next action is to open a bank account under the company’s name. All business transactions will be made using this bank account.
- A sole proprietorship firm does not need to register specifically to start up, but it does need to secure a few fundamental registrations in order to operate. Typically, a sole proprietorship needs the following licenses:
- In accordance with the state’s Shops and Establishment Act, the proprietor is required to obtain the business’s Registration Certificate.
- If a sole proprietorship’s annual revenue reaches Rs. 20 lakhs, it must additionally register for GST.
- Although it is not necessary, but registering as a Small and Medium Enterprise is beneficial for the sole proprietorship, under the MSME Act.
Required Documents for a Sole Proprietorship
The following are the documents needed to register a sole proprietorship:
- Pan card of the owner
- Aadhaar Card.
- proof of registered office.
- Bank Account details
Required Checklist for Sole Proprietorship
- PAN card for the business owner.
- Name and location of the company.
- A bank account in the business’s name.
- registration with the relevant state’s Shop and Establishment Act.
- If the business turnover reaches Rs. 20 lakhs, registration under GST is required.
What Regulations Must You Comply With?
Every year, you as a sole proprietor must file an income tax return. In case you are registered for GST, you must also file your GST Return. A sole proprietor should also deduct TDS and submit a TDS return if they are the subject of a tax audit.
Time Taken for Registration for Sole Proprietorships
Establishing a business bank account and obtaining a Certificate of Registration from the state’s Shop and Establishment Act and registering for GST are requirements for a sole proprietorship. The registration procedure takes approximately 10 days, subject to departmental approval and returns from the pertinent department.