COMPLETE PROCESS OF REGISTRATION OF SOLE PROPRIETORSHIP
| DOCUMENTS | PROCESS | REQUIREMENTS
INTRODUCTION:
Registration of sole proprietorship is a kind of commercial business activity owned and managed by a single individual, without any distinction between himself and the business. Since the sole ownership isn’t discrete from the proprietor, the business and the proprietor are consolidated for the purpose of responsibility, benefits, liabilities, and obligations. It is known by various names, such as individual entrepreneurship, sole trader-ship, and proprietorship. A business consequently turns into sole ownership in the event that it is enrolled without an assigned business structure. A sole proprietor at times employs individuals under him to help him out in routine business activities.
The sole proprietorship is a type of business where the owner of the business can start it without any difficult paperwork or compliances. Any kind of registration fee is not required to begin a business activity. Moreover, any kind of basic capital requirements are not necessary. The sole ownership business requires just business or firm name and the location where the business will be conducted. A proprietor is safe from double taxes as he is not separate from the business, so he has to pay taxes only in his personal income capacity and does not have to pay taxes separately in the name of the firm.
For more information, please contact us on info@trijuris.com or call us Mb. No. 85100 58386 or 9310 717274.
BENEFITS OF STARTING A SOLE PROPRIETORSHIP BUSINESS:
1. Sole owner: As the name suggests, the sole proprietorship is a type of business where there are no other partners, and he is the only owner of the business.
2. Full control: A sole owner has full oversight and control of their company. Since there could be no different proprietors, and no lawful agreements limiting possession, the sole owner can do whatever is essential to make a big difference for the business, whereas, in a partnership or LLP structure, possession is assigned by an agreement.
3. Easy to start: A proprietorship business is simple to start without any complications on the way. There need not register the firm or go through any complex procedures to start the business, unlike partnerships where there is a complex structure of documentations.
4. Taxes: A single-owner business is secured from the payments of double taxes, as in the case of partnership firms where owners have to pay income tax as well as tax on the income of the firm.
A sole proprietor pays taxes on the ‘schedule C’ of the owner’s private tax return and the income from the sole prop. is taxed at the owner’s personal rate.
5. Quick decisions: Proprietors can take fast steps and dispose of things quickly. Consulting someone at sometimes delays the action which is to be taken for the success of the business e.g. If a quick decision to grant a fat discount to a loyal customer brings them additional business, they can do so on the spot.
6. Economical and efficient operations: The proprietor can assemble his sources to the best use. He can find ways to dispense with wastage. He can handle the expense of managing everything. He can get the greatest advantage out of each piece of activity. The danger of losing his grasp over his business and being moved to a corner by rivals keeps him careful, ready, and wary.
DRAWBACKS OF HAVING A SOLE PROPRIETORSHIP BUSINESS:
1. Individual Liability: When picking to have your business become sole ownership, you’re taking on full responsibilities of the business. While practically every other business structure accompanies a few securities heated in for the entrepreneurs or individuals from an association, there are zero such safeguards for the single proprietor of sole ownership.
2. Existence Limited: A sole owner business is concurrent with its proprietor. If something happens to the proprietor, the business can’t proceed. Interestingly, with private limited company or a Limited liability partnership, if something happens to one person, the business can proceed but not in proprietorship.
3. Restricted access to resources: A proprietor has limited resources at his/her command. The proprietor mainly relies on his/her funds and savings and, to a limited extent, borrowings from relatives and friends. Thus, the scope for raising funds is highly limited in proprietorship. This, in turn,’ deters the expansion and development of an enterprise.
4. Finite abilities: Ownership is portrayed as a limited show. One man might be a master in a couple of areas. However, he is not an expert in all spaces like creation, account, promoting, staff, and so on. At that point, because of the absence of sufficient and applicable information, the choices are taken by him be imbalanced.
For more information, please contact us on info@trijuris.com or call us Mb. No. 85100 58386 or 9310 717274.
THE REGISTRATION PROCESS FOR A SOLE PROPRIETOR:
The process of registration of sole proprietorship is very much easy compared to other types of partnership business. There is no complex type of documentation. Moreover, a sole proprietor does not need to register his firm, which makes it easy for the sole proprietor to start a business activity. However, there is a basic process that is to be followed in order to start a new business:-
1. Selection of business name:- The sole proprietor has to select a suitable business name, but there are certain conditions to it as one has to choose a name that is not as the same or is identical. Also, the name must not contain any vulgar words and must not hurt any religious sentiments.
2. Location: A suitable location is selected by the proprietor for performing the business activity. The location is based upon the type and nature of the business. Accessibility to the raw material/ products is also an important consideration.
3. Bank account: To receive payments in the name of the business, a sole proprietor needs to open a current account in a bank. For this, he will need proof of the existence of the firm and the address proof. Documents that are required for opening a bank account include:
• ID for address proof of proprietor + Aadhar card of the proprietor.
• Business address proof (electricity bill etc.)
• Two govt documents confirming the name and address of the business.
• CA certificate
PROCESS OF REGISTRATION OF SOLE PROPRIETORSHIP
1. Registration as Small & Medium Enterprise: You can get yourself enlisted as a Small and Medium Enterprises (“SME”) or Udyam Registration under the MSME Act. The application can be documented electronically. Despite the fact that it isn’t obligatory to enlist as a SME, it is exceptionally helpful, particularly at the hour of taking credit for the business. The Government runs different plans for SMEs where credits are given at the concessional pace of interest.
Read more: ONLINE PROCESS OF MSME REGISTRATION/UDYAM REGISTRATION: https://www.trijuris.com/msme-registration/
2. GST Registration: A sole proprietor can get himself registered under GST Act if his annual turnover is exceeds INR 40 Lakhs. Further, it is mandatory to take registration under GST Act if he is doing online business (selling through E-Commerce sites like Amazon, Flipkart, etc.); sole proprietor required to get a GST number. For registering under GST, you need the following documents –
• PAN, Photo, and Aadhar Card of the proprietor
• Business Address proof
• Bank statement
• Photo
Read More: A Step-by-Step Guide to GST Registration Procedure in India: https://www.trijuris.com/gst-registration/
For more information, please contact us on info@trijuris.com or call us Mb. No. 85100 58386 or 9310 717274.
ALSO, THERE ARE THREE WAYS THROUGH WHICH REGISTRATION OF SOLE PROPRIETORSHIP CAN BE DONE:
1. Under Shop & Establishment Act: A sole owner can enroll his business under the Shop and Establishment Act in the event that he has a shop as a position of the business.
Here, shop implies any premises:
where products are sold, either by retail, discount, or a spot from where administrations are given to clients.
It incorporates an office, a store-room, godown, distribution center, or workplace, regardless of whether in similar premises or something else, which is utilized regarding such exchange/business.
It does exclude a manufacturing plant, a business foundation, private lodging, eatery, eating house, theatre, or another spot of public delight or amusement.
2. Under Ministry of MSME through Udyog Aadhar: An Udyog Aadhaar is a UID proof No. given by the ministry to the entrepreneurs. Alongside any remaining substances like organization and association, even a sole owner can apply for UdyogAadhaar.
Aside from getting qualified to profit from the advantages offered by the Ministry of MSME, a sole owner has an additional benefit of getting a remarkable personality for his business which is likewise considered as Sole Proprietorship Registration.
Udyog Aadhaar is another technique for enrolment under the Ministry of MSME. It has supplanted the old technique for enlistment, where structure EM-I and EM-II were utilized to enlist. Presently, by applying for Udyog Aadhar, any business can enlist itself to profit from the advantages of the different plans presented by the Ministry of MSME.
3. Through GST Registration: GST enrolment is another method of getting your sole ownership enlisted. You can apply for GST enlistment if you are managing any sort of exchange of services and products/goods. It has supplanted the old VAT and Service charge enlistment.
GST enrolment is an incredible technique for getting a personality for your sole ownership concern. In any case, there are sure significant contemplations that should be assessed prior to selecting this strategy.
Under GST enlistment, the solitary downside is that after enrolment, it is required to meet every one of the compliances. Each enrolled business needs to obligatorily gather the assessment from the clients and document the GST returns.
CONCLUSION
The Sole Proprietorship method of business is the easiest way to establish any business. Because of the non-existence of any complex procedures, the proprietor has its own side, the benefit of establishing and running a business smoothly. Although it has its own demerits for the small and the medium businessmen, it is the quickest available method to start a business easily.
For more information, please contact us on info@trijuris.com or call us Mb. No. 85100 58386 or 9310 717274.
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