The following article gives you detailed information on what to do to file a sole proprietorship in Gurugram. Read on to know more.
Every time a person does business in India on their own, they are operating their own company, it’s called a sole proprietorship firm. Proprietorship firm registration is not legally required in India; you can operate a sole proprietor firm legally without registering.
However, in the modern era of KYC and specific bank rules and regulations, banks will not process applications for current bank accounts in the name of firms unless you have a valid Firm Registration Certificate. Furthermore, you must register your business for GST if you conduct online business through an e-commerce platform.
What Are the Documents Needed to Register a Proprietorship Firm in Gurugram?
Here is a list of all the necessary documents that you will need to register your proprietorship firm in Gurugram, India:
- A picture of the owner in colour
- The company’s registered office name
- A photocopy of the owner’s Pan card and Aadhar card
- A working phone number and email address
- A list of the products and services your company provides
- The owner’s cancelled check, the first page of the passbook, and the savings account statement
- If the commercial property is yours, present a rent agreement or electricity as proof of ownership.
How to Legally Start a Sole Proprietorship Business in Gurugram?
Starting a sole proprietorship is not difficult. All you have to do to start a sole proprietorship is:
- Choose a company name that will pass legal scrutiny
- Find a suitable location for your company
- Apply for licences that are currently valid for your business or your state.
And you are done!
Gains From Registering A Sole Proprietorship
Here are some of the most prominent benefits of a sole proprietorship firm:
- The simplest type of business: We can all find stores operating modest businesses in our neighbourhood. These are all one-person businesses. This company is straightforward to start. They don’t involve complexity and can be comfortably handled by one person.
- No legal hassles: These enterprises are simple to launch because no legal registration is necessary. Only licences that are unique to the type of business must be registered. Therefore, anyone can quickly establish a firm using their own trading name, provided that it does not conflict with an existing brand name. Additionally, the registry’s approval is not necessary.
- Lower initial investment: A sole proprietorship can be launched with little or no initial cash. This proves to be an intriguing option for someone who wants to start a business but has limited resources.
- No division of earnings: A sole proprietor is a person who owns and runs a firm alone. Therefore, he will be the only one to benefit from the revenues made.
- Fewer legalities: Because a sole proprietorship is not subject to any particular laws, fewer legal requirements exist. Their Certificate of Incorporation or Registration Certificate is not predetermined. Therefore, a certain sole proprietorship’s registrations or licences will determine the compliances. For instance, if a sole proprietorship registers for the GST law, it must adhere to the GST return filing requirements, etc. However, there is no necessity to post the annual report or other data on the MCA website.
- Information confidentiality: The details are kept private in a solo proprietorship, unlike other businesses, such as Limited Liability Partnerships, where consumers can view financial accounts and audit reports on the MCA website. The financial statements continue to be held privately.
- Self-decision making: Because a sole proprietorship is run and controlled by a single individual, there won’t be any disagreements over policies or choices.
- There isn’t a set requirement for an audit: A sole proprietorship is not required to have its books audited every financial year. The audit will be conducted by the audit’s threshold turnover restrictions and the nature of the firm. A tax audit is necessary if sales or turnover surpasses ₹1 crore. If receipts for professional services exceed ₹50 lakhs, an audit is required. A GST audit is necessary if the turnover is more significant than ₹2 crores.
- Less Income Tax: Since a single proprietorship only has one owner, there is no additional tax that must be paid by it. When determining the tax liability, they are both treated equally. The Sole Proprietor must file his regular return and include the business’s profits therein.
How Can I File An ITR For A Gurgaon-Registered Proprietorship Business?
Gurgaon-registered proprietorship businesses must file Form ITR 3 or ITR 4 Sugam.
Form ITR 3 The proprietor or a Hindu Undivided Family doing a proprietary business or practising a profession may file Form ITR 3.
ITR4 Form – The proprietorship registered in Gurgaon that wishes to pay income tax under the current tax plan must file Form ITR 4 Sugam, otheriswe they will get income tax notice. By assuming a specific profit margin on the entire income of the business or trade, a service tax scheme is intended to reduce the compliance burden for small firms.
The proprietors’ digital signatures on Forms ITR 3 and ITR V can be used to file the income tax returns for a sole business electronically.
What Post-Incorporation Requirements Are There For Proprietorships That Are Registered In Gurgaon?
Like Limited Liability Partnerships and Private Limited Companies, Proprietors must submit income tax returns. Since the proprietor and the proprietorship are regarded as the same, only income tax returns must be filed.
Conclusion
A sole proprietorship has the same advantages and disadvantages as any other kind of business. Let’s say you’re considering starting a sole proprietorship. In that situation, before selecting the ideal business structure for you, you should carefully analyse the needs, risks, and objectives of the company. The best course of action is to get in touch with Vakilsearch, the top provider of legal services in India. Your documentation will be completed quickly and easily with the assistance of our legal specialists.
Also Read,
