Sole Proprietorship Registration in India

What is Sole Proprietorship in India?

A sole proprietorship business in India is the simplest form of business structure that is owned, managed and controlled by the sole owner.  The sole proprietorship is not a legal entity rather it just refers to a sole person who owns the business and is personally liable for its debts.  This is one of the most popular forms of business structure for micro and small businesses operating in the unorganized sectors due to its simplicity, ease of information access and nominal cost. These factors combined have made getting certificate of incorporation for sole proprietorship a good idea.

However, getting certificate of sole proprietorship is generally not suitable for the medium scaled and large scale businesses due to the array of disadvantages like unlimited liability, no separate legal entity, non-transferability and limited life of the business.

The government of India has not prescribed any mechanism for the registration of sole proprietorship firm.  Thus, the registration of a proprietorship can only be recognized through tax registrations that the business is required to have as per the rules and regulations.  These tax registrations may include GST Registration that must be obtained in the name of the Proprietor to establish that the Proprietor is operating a business as a sole proprietorship.

Eligibility Criteria for Sole Proprietorship Registration in India

As the government doesn’t count Sole Proprietorship as a legal business entity, it has not given any discernible criteria to start one. Thus to get sole proprietorship, you need to adhere to all the following criteria:

• You need to be a tax paying citizen of India: Online sole proprietorship firm registration is only for those entities that are running a local business. If you do, only then you can start a proprietorship firm. This business entity is deemed too free by the government of India and therefore, only those from India can start this business entity:
• You need to obtain GST registration for your business name: If the annual turnover of your business is more than INR 40 Lakh, you must get the GST registration certificate in India. It will act as a proof for your business.
• You need the bank account in the name of your proprietorship firm: One criterion for sole proprietorship firm certification is that you must open a bank account in the name of your proprietorship. It will help you conduct your business financial transactions properly.

Documents Required for Sole Proprietorship Registration in India

The documents required for registering a proprietorship firm entails the attachments that you need to get registrations that will give your business an identity.

Thus, you will need two things:

1. Documents required for opening a bank account for your sole proprietorship;
2. Documents required for GST registration for Sole Proprietorship.
3. Documents required to obtain a PAN card.
4. Documents required for Shops and establishment Registration

Documents required for opening a bank account of your Sole Proprietorship firm

1. Proof of name: Provide a proof of the name of your Proprietorship firm.
2. Proof of address: Provide details of the address details of the proprietorship firm
3. Activity of concern: Provide the details about your business objective. You can either us an existing invoice or a detailed write up.
4. Provide other business registrations: Send a copy of the registration certificates pertaining to your business to the banks.
5. ITR return: Copy of last year’s income tax return
6. Utility bills: Provide a copy of the utility bills to reinforce your address proof.

Documents required for GST registration

1. Your PAN card
2. Your AADHAR Card
3. Your Photo Graph
4. Your proof of address
5. Your Bank Account Details

Documents required for PAN card:

1. Your AADHAR card
2. Your photograph
3. Sample of your signature

Documents required for Shops and Establishment Registration

1. Utility Bill of the firm
2. AADHAR Card or VOTER ID Card or PAN Card
3. Your Photograph
4. Details of your business
5. Architectural Blueprint of your business

Process for Sole Proprietorship Registration in India

Here is the answer to your question – how to start a sole proprietorship firm in India.

The procedure for Sole Proprietorship registration in India is as follows:

• Choose the name of the business.
• Check if the chosen business name is unique.
• File the online application for GST registration
• Upload the required documents.
• Obtain GST registration certification few days after filing the application
• Setup a bank account in the name of the sole proprietorship.

Note: There is no Sole proprietorship registration online. It is just a marketing term meant to lure. The truth is, to start a sole proprietorship, you need to physically pay a visit to the authorities and provide them with the documents.

Our Assistance in Sole Proprietorship Registration in India

We, at UST Associates provide end to end solutions for Sole Proprietorship registration in India. Our services include:

• Collection of basic document and information
• Application drafting
• Reviewing the application and making changes if needed
• Obtaining the registration certificate and delivering it to you.
• Helping you obtain Shops and Establishment Registration certificate

UST Associates is a leading legal consultancy firm providing the comprehensive services relating to incorporation of a sole proprietorship. Our expert team will provide you full-fledged assistance required for the seamless registration of sole proprietorship firm.

Frequently asked questions – Sole Proprietorship Firm Registration FAQs

Q1. What is Sole Proprietorship firm in India?

A sole proprietorship business in India is the simplest form of business structure that is owned, managed and controlled by the sole owner.  The sole proprietorship is not a legal entity rather it just refers to a sole person who owns the business and is personally liable for its debts. 

Q2. Where to register a Sole Proprietorship?

Sole proprietorship is registered by opening a bank account in the name of the firm. It can be done at any bank.

Q3.  What are the 6 Characteristics of a Sole Proprietorship?

1. Easier registration process
2. Not many regulatory requirements
3. Lack of a business agreement
4. Unlimited Liability
5. Single Owner business

Q4. What are the documents required for Sole Proprietorship Registration?

Sole proprietorship in India requires the following documents:

Documents required for GST registration

• Your PAN card
• Your AADHAR Card
• Your Photo Graph
• Your proof of address
• Your Bank Account Details

Documents required for PAN card:

• Your AADHAR card
• Your photograph
• Sample of your signature

Documents required for Shops and Establishment Registration:

• Utility Bill of the firm
• AADHAR Card or VOTER ID Card or PAN Card
• Your Photograph
• Details of your business
• Architectural Blueprint of your business

Q5. What is the procedure of Sole Proprietorship Registration in India?

• Choose the name of the business.
• Check if the chosen business name is unique.
• File the online application for GST registration
• Upload the required documents.
• Obtain GST registration certification few days after filing the application
• Setup a bank account in the name of the sole proprietorship.

Q6. What is considered a sole proprietorship?

A sole proprietorship registration in India is a single owner business entity.