A sole proprietorship is a business model wherein a single individual owns and manages the whole enterprise. In this system, there is no legal distinction between the owner and the business entity. Although a sole trader may choose to work with other individuals, they are the sole owner and decision-maker.
The sole trader is entitled to all profits generated by the business, subject to specific taxation applicable to the enterprise. However, they bear unlimited responsibility for all losses and debts incurred by the business. In this setup, every asset owned by the business is under the proprietor's ownership, and all debts are the personal responsibility of the proprietor.
Sole Proprietorship Registration Tamil Nadu is crucial for functioning legally. Get to know more about Sole proprietorship registration, Eligibility criteria, Documents, Process to Register a Sole Proprietorship, Time required for registration, Benefits and FAQ’s for Sole Proprietorship Registration in Tamil Nadu.
Sole Proprietorship Registration in Tamil Nadu
One of the earliest and simplest business structures to establish in India is the sole proprietorship. The necessary details will be provided for the people who wish to start a business by themselves. A proprietorship cannot have additional partners or shareholders because the proprietor and the business are one and the same. Furthermore, the proprietor's minimal liability from the business operations carried out under the sole proprietorship is unprotected. Therefore, small firms with no more than 5 employees are best served by this type of corporate entity.
Eligibility for Sole Proprietorship Registration in Tamil Nadu
The following eligibility criteria for Sole Proprietorship Registration in Tamil Nadu
- The applicant must be an Indian citizen or possess an OCI (Overseas Citizen of India) card to register as a sole proprietor in India
- The minimum age required to register as a sole proprietor is 18 years
- The proprietor must be of sound mind to enter into contracts and make business decisions
- Individuals declared bankrupt or disqualified by law, cannot register as sole proprietors
- Businesses like banking or defence production, require specific licenses or permissions and may not be suitable for sole proprietorship registration
- The proprietor cannot be involved in any other form of business, like a partnership or a limited liability company.
Recognition and Legal Status of a Proprietorship
The proprietorship is not recognised separately as a distinct legal entity. Therefore, for all legal and official purposes, the proprietorship and the business owner are regarded as one and the same. There is no GST exemption for example. GST, MSME Registrations are mandatory.
Licenses and Registrations for Sole Proprietorships
The proprietor must acquire PAN and Aadhar in order to operate a proprietorship firm in India. The business owner must register for UDYAM, GST, and open a bank current account. The owner may additionally need to register under the Shops & Establishment Act in several states.
Depending on the business, the state, and the local rules, extra licenses and permits can be necessary in addition to the above fundamental criteria.
Documents Required for Sole Proprietorship Registration in Tamil Nadu
Listed below are the few documents required for proprietorship registration in Tamil Nadu. People should be careful while submitting the documents because one mistake can cancel the whole registration process in Tamil Nadu. The following documents are required for registering Sole Proprietorship in Tamil Nadu
Documents of the Proprietor
- Two coloured Photographs
- Aadhar card
- PAN card
- Cancelled cheque
- Address proof (Voter ID / Driving License / Passport / Bank statement not older than 2 months / Electricity bill not older than 2 months)
Documents of the registered address for Proprietorship Registration
- Proof of address (Electricity Bill / Property tax receipt / Sale Deed / Stamped and notarised rent agreement. The bills and receipts must not be older than two months.)
- NOC from the owner of Premises in the prescribed format
Steps Involved in Sole Proprietorship Registration in Tamil Nadu
Vakilsearch provides an easy four step process for Sole proprietorship registration in Tamil Nadu :
Step 1: Unique Business Name Selection
Rely on our expertise to guide you in choosing an exclusive and unregistered business name that aligns with your vision.
Step 2: Seamless DSC Acquisition
Vakilsearch ensures a smooth acquisition of the Digital Signature Certificate (DSC), a vital digital key required for electronic document signing before ROC registration.
Step 3: Customised Document Preparation
Trust our team to assist in preparing the necessary registration documents, personalised to meet the specific requirements of your state.
Step 4: Effortless Submission to ROC
We simplify the process by handling the submission of your documents to the Registrar of Companies (ROC) for meticulous review and prompt approval.
Note: For businesses with physical locations, Vakilsearch facilitates the hassle-free acquisition of a trade license from the local authority, ensuring compliance with city-specific regulations.
Fees for Sole Proprietorship Registration in Tamil Nadu
The fees for registering a sole proprietorship in Tamil Nadu vary as per the state and the services you choose. These fees include the costs of filing the necessary paperwork and obtaining any required licenses. For more information get in touch with our experts.
Time Taken for Sole Proprietorship Registration in Tamil Nadu
In India, establishing a sole proprietorship is a simple procedure. The exact time frame depends on state protocols and documentation validation. It could take, on average, seven to ten working days for your business to be officially recognised. However, this time frame could alter. Get in contact with our specialists for further details.
Benefits of Sole Proprietorship Registration in Tamil Nadu
Here are the reasons for any person to think upon on why one should be a sole proprietor in Tamil Nadu:
Simple to Establish
An applicant who wishes to conduct their business activity as a Sole Proprietor is exempt from the registration requirement. To operate their firm legally, they only need to obtain business-specific permits or registrations.
Look for Low-Risk Investment
The Sole Proprietorship model is frequently chosen by small firms like retail shop outlets, grocery retailers, and so on and so forth because it is advantageous for low-cost business concepts.
By incorporating a business structure similar to a private limited company, One Person Company attempts to spend a sizable amount on capital acquisition, which would be nil under the Sole Proprietorship model.
Guarantees a Profit-Free Distribution
The sole proprietors act as the business's sole owners and take pleasure in having complete control over their profits.
Follows Only Minimum Regulations
The Sole Proprietorship company model is free to operate without expensive compliances because it is not subject to any special laws. They are permitted to operate without a Certificate of Incorporation or Registration Certificate, unlike organisations operating under the 2013 Company Act. They are also not required to share annual reports with MCA. Such enterprises must, however, adhere to all applicable GST compliance requirements. They are also required to register under the current GST Act in light of this.
Promote Lower Taxes
The tax authority does not differentiate between a sole proprietorship and a sole proprietor. They do not have to deal with different tax liabilities as a result. A sole proprietor must file an income tax return under the Prevailing IT Act. It is a method of disclosing revenue and profit made prior to the taxing authorities for the specified FY. Please keep in mind that tax estimation is done using the taxpayer's appropriate income tax slab rates. As a result, the Sole Proprietorship firm is not required to file a separate tax return.
Why Vakilsearch?
Vakilsearch has provided a number of services for more than 50k companies via our online platform. Vakilsearch takes pride in the services we offer and guarantees that you will enjoy both our help and our services. We put a lot of effort into providing the best registration, financial, or administrative services online and are always looking to improve. Experience the ease of Vakilsearch's legal services. In any instance, Vakilsearch gathers and double-checks the documentation for proprietorship registration. Vakilsearch also helps in GST registration and UDYAM registration.
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