Get assistance for Sole Proprietorship in India. Online & easy Business Registration

Sole proprietorship is one of the oldest and easiest Business Structures to start business in India. Sole Proprietorship is best suited for small businesses. Our team of professionals can help you set up a Sole Proprietorship business in India till opening of a current bank account in your business trade name.

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What is a Sole Proprietorship?

In India, sole proprietorship is a widely embraced business structure. In sole proprietorship, a single individual assumes complete ownership, management, and control of the enterprise.

Benefits of a sole proprietorship firm

#1 Only sole proprietorship registration and one person company allow to be sole beneficiary of profits.

#2 Compliance requirements for proprietorship firms are minimal and income tax filing required only for taxable income over certain thresholds.

#3 Sole proprietors can avail tax deductions permitted to individuals to reduce income tax liability

#4 Proprietorship firms offer more privacy as compared to registered entities like companies or LLPs

#5 The process of Sole Proprietorship Firm Registration is quick and easy.

Procedure for sole proprietorship registration

#1 Choose a name for your business

#2 Obtain the necessary licenses and permits required to operate a business in your state or city

#3 Apply for Shop and Establishment Act License in your city

#4 Open a current bank account in the name of your business

#5 Register for taxes, such as GST, and obtain any necessary tax identification numbers

Document required sole proprietorship registration

- ID proof

Aadhaar Card

PAN Card

- Office Address Proof

The rental agreement for registered office proof.

Sale deed or utility bill for the self-owned property.

- Passport Size Photo

Sole Proprietorship Vs One Person Company

Sole Proprietorship Registration One Person Company
Does not require any separate formal registration for business formation OPC require to be registered with the Ministry of Corporate Affairs
Proprietor's legal identity is used by the business OPC has a separate legal identity from its owner
Unlimited liability of the proprietor Limited liability of the owner
No minimum capital requirement Must have a minimum paid-up capital of Rs.1
Proprietor is the sole beneficiary of profits Owner may withdraw director remuneration, profit as a dividend
Minimal compliance requirements Must comply with various statutory regulations as per companies act, 2013
Taxed as per the individual income tax slab which range from 5-30% Taxed as per the company's income tax flat rate i.e. 26%
Not suitable for businesses that require external funding or have a high risk of legal liabilities Suitable for small businesses that require limited liability and want to raise funds

Taxation on Sole Proprietorship Firm

If you run a business alone in India as a sole proprietorship firm, you don't need to file a separate income tax return for the profit you earned from your business.

Sole proprietors are required to declare business profit in his/her personal income and tax as per individual tax slabs in its own income tax return.

Thus, the tax rates for sole proprietorships in India are the same as those for individuals

Income Tax

#1 If you generate income through a profession or a proprietorship business and belong to the category of Hindu Undivided Families (HUFs) or resident individuals, you will need to use the ITR-3 Form to file your income tax return.

#2 If you own a sole proprietorship firm and your total income is up to 50 lakh, and your Income from Business and Profession is computed on a presumptive basis, then you need to use the ITR-4 or SUGAM form to file your income tax return.

GST

It is mandatory for Sole Proprietorship Firm to apply GST Registration for its business in following scenarios:

#1 When annual turnover exceeds 40 Lakhs and 20 Lakhs in Special Category States.

#2 If you're selling products or services across state borders whether on your own or through an e-commerce portal.

#3 When a sole proprietorship firm wishes to claim input tax credit for inputs on a purchase voluntarily.

Understand in Detail: What Is The Eligibility Criteria For GST Registration?

Current Bank Account for Sole Proprietorship Firm

Our experts can help you open a current bank account at your premises for your business without any hassle.

To open a current bank account after getting sole proprietorship registration, you need to provide following documents:

#1 PAN Card

#2 GST Registration Certificate

#3 Acceptable identity proofs are Passport, Voter Identity Card, Driving License, or Aadhaar Card.

#4 Acceptable address proofs.

#5 Passport size color photograph.

#6 To complete the account opening process, you need to provide an account Opening cheque from your existing Savings/Individual Current Account.

Annual Compliances for sole proprietorship firm

Proprietorship firms are simple businesses but are still subject to certain compliance requirements. These include:

#1 ITR Filing

#2 GST Return Filing

#3 TDS Return Filing

#4 EPF Return Filing after getting EPF Registration

#5 Accounting and Bookkeeping

#6 If you are a sole proprietor and your business's sales, turnover or gross receipts exceed Rs. 1 crore in the financial year, you must have a tax audit done. Additionally, there may be other circumstances where you are required to get your accounts audited.

#7 FSSAI Registration and FSSAI Return Filing if involved in Food Business

#8 MSME Registration to claim benefits from the government

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frequently asked questions

You can register a sole proprietorship firm by obtaining necessary licenses and permits required for your business and opening a current bank account in the name of your business.

Sole proprietorship registration can be done quickly, usually within a few days, as there is no separate legal entity created.

To start a sole proprietorship legally, you need to obtain necessary licenses and permits, choose a suitable business name, and register for taxes and other regulatory requirements as applicable.

There is no separate certificate issued for sole proprietorship registration. You can obtain necessary licenses and permits and use them as proof of your business registration.

No, in the case of a proprietorship firm, the PAN card shall belong to the individual owner only

The proof of a sole proprietorship firm can be in the form of licenses and permits obtained for the business, bank statements, and tax registrations

Yes, a sole proprietor can claim GST input tax credit on the purchases made for business purposes after GST Return Filing.

The proprietor can file the Income Tax Return (ITR) using his/her PAN card, declaring the income and expenses of the business as per the tax laws

No, You don't need to be physically present for the process, E-StartupIndia is an online catering platform all you need is an internet connection  in your phone/computer and the required documents with you and we can get the job done no matters even if you are present at the remotest location of India

The task of Sole Proprietorship registration is performed by our experienced professionals 

 

Yes E-StartupIndia is an online platform serving all over India no matters wherever you are doing business all you need is internet connection on your mobile or desktop and we are ready to get your job done

The major benefit in a Sole Proprietorship business is that the trader is given concession in taxes. He is liable to pay tax at the slab tax rate, which starts from 5% and goes upto 30%

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