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Sole Proprietorship

Small manufacturers and traders, who typically have just a GST registration, are known as sole proprietors.

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Why Should You Register For A Sole Proprietorship?

A Sole Proprietorship provides maximum privacy to its owners and has an
easy establishment and operational process.

Service Pick
We help you pick the right government
registration

Step 1

Vendor Connect
We connect you with a verified vendor to file
the application

Step 2

Receipt of Registration
We offer continuous support until you receive
the registration

Step 3

Service Pick
We help you pick the right government registration
Vendor Connect
We connect you with a verified vendor to file the application
Receipt of Registration
We offer continuous support until you receive the registration

What is a Sole Proprietorship? - Overview

When a business is owned and governed by one person, it is called a sole proprietorship company. This type of business can be incorporated in fifteen days and hence makes it one of the most popular types of business to begin in the unsystematic sector, specifically among merchants and small traders. For a Sole Proprietorship business, registration is not required as it is identified through alternate registrations, such as GST registrations. However, its liability is unlimited and it also doesn’t have perpetual existence.

Begin Sole Proprietorship registration

Benefits of a Sole Proprietorship


Minimum Compliance

Sole Proprietorships have minimum compliance requirements as they are identified by government and tax registrations. Therefore, their agreements are confined to yearly filings of service, sales, or professional taxes.

Simple to Begin

A Sole Proprietorship is simple to begin. One needs to simply have a GST Registration in place. This business can be set up in 15 days with the help of a PAN card.

Economical

When compared to an OPC or One Person Company, a Sole Proprietorship is economical due to its minimum compliance requirements, including no need to hire an auditor. One of the main reasons why small merchants and traders choose this type of companies.

Checklist Items for a Sole Proprietorship Registration

  • A certificate/license issued by Municipal authorities under the Shop & Establishment Act.
  • The license issued by Registering authorities like the Certificate of Practice IS issued by the Institute of Chartered Accountants of India.
  • The registration/licensing document is issued in the name of the proprietary concern by the Central Government or the State Government Authority/ Department, etc,
  • The banks may also accepts the IEC (Importer Exporter Code) issued to the proprietary concern by office of the DGFT as an identity document for opening of the bank account etc,
  • Complete Income Tax return (not just the acknowledgement) in the name of the sole proprietor where the firm’s income is reflected, duly authenticated and acknowledged by the Income Tax Authorities,
  • The utility bills such as electricity, water, and the landline telephone bills in the name of the proprietary concern,
  • Issue of GST Registration/Certificate.

How Vakilsearch Executes A Sole Proprietorship Registration Procedure


Professional Guidance

Our experts give your professional guidance on many of the processes involved in registering your business as a sole proprietorship, along with registration of service tax, sales tax, import/export code, professional tax or Shops and Establishments Act.

Vendor Relationship

Our team will connect you with an established vendor who will book your application and also keep you updated on its status and progress. The vendors we have onboard are well-accomplished and skillful in managing native registrations.

15 Business Days

Our team will offer full assistance with the registration process. This could vary between 5 and 15 days, depending on the task at hand for the authorities involved.

What Are The Documents Required For Registering A Sole Proprietorship

To start a Sole Proprietorship, the following documents are required

  • Address and identity proof
  • PAN card, KYC documents and
  • Rental agreement or sales deed (in case of Shops & Establishment Act Registration).

What Are The Documents Required For Opening A Current Account

To open a current account, the following documents are required;

  • Proof of the existence of your business.
  • Shops & Establishments Act Registration.
  • PAN card.
  • Address and Identity proof.

FAQs on Sole Proprietorship

Any Indian citizen with a current account in the name of his/her business can start a sole proprietorship. Registration may or may not be required, depending on the type of business that is planned to be established. However, to open a current account, banks typically require a Shops & Establishments Registration.
A Sole Proprietorship business does not take more than 15 days to set-up and start functioning. This simplicity makes it popular among small traders and merchants. It's also much cheaper, of course. This is the other reason why it's the most widely used business structure.
Most local businesses are run as sole proprietorships, from grocery stores to fast-food vendors, and even small traders and manufacturers. That is not to say that larger businesses cannot operate as sole proprietorships, they can! Jewellery shops are sole proprietors, but it is not recommended.
This depends on the business you're in. It is compulsory for any business whose turnover in a financial year exceeds Rs 20 lakhs (Rs 10 lakhs in the case of North Eastern states) to get a GST registration. For businesses that are involved in selling goods or services to customers out of a commercial establishment, it is mandatory to register under Shops and Establishments Act.
Yes, it is much cheaper to run an LLP than a private limited company. Mostly because compliances, such as an audit, apply to LLPs only after their turnover is sizeable. Most LLPs spend about half as much as a private limited companies, in their first year on registrations and compliance work.
The procedure involved is a little tedious, but it is possible. It is very common for sole proprietors to convert into partnerships or private limited companies at a later stage of their businesses.

Why Vakilsearch


Access To Experts

We provide access to reliable professionals and coordinate with them to fulfill all your legal requirements. You can also track the progress on our online platform, at all times.

Realistic Expectations

By handling all the paperwork, we ensure a seamless interactive process with the government. We provide clarity on the incorporation process to set realistic expectations.

300-Strong Team

With a team of over 300 experienced business advisors and legal professionals, you are just a phone call away from the best in legal services.

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Types of Government Registrations

Recommended For

Ease of Accommodating Investment

Limited Liability Protection

Tax Advantages

Perpetual Existence

Statutory Compliances

Sole Proprietorship
Limited Liability Partnership
One Person Company
Private Limited Company
Partnership Firm

Small traders and manufacturers

Impossible

No

Minimal

No

Minimal

Professional services firms

Possible, but unlikely

Yes

Most efficient

Yes

Low

Sole promoters

Possible, but severely unlikely

Yes

Few benefits

Yes

High

Start-ups and growing companies

Very easy to accommodate

Yes

Few benefits

Yes

High

Home businesses

Almost impossible

No

Minimal

No

Minimal

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