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All You Need to Know

What is Sole Proprietorship Registration?

A sole proprietorship is a type of business entity owned, controlled, and managed by a single person, known as the sole proprietor. Since the business is run by an individual, there is no legal distinction between the owner and the business. The owner directly receives all profits and bears all losses. Starting a sole proprietorship is straightforward due to minimal legal formalities and lower formation costs.

Sole Proprietorship Firm Registration

The Government of India has not established specific rules or a formal registration process for sole proprietorship firms. Therefore, the existence of a proprietorship is typically recognized through required tax registrations. These may include GST Registration and/or SSI/MSME/Udyam Aadhar Registration, which should be obtained in the proprietor’s name to establish the business as a sole proprietorship.

Why Choose My File Tax for Your Sole Proprietorship Firm Registration?

At My File Tax  is a leading business platform offering comprehensive services for incorporation, compliance, advisory, and management consultancy to clients in India and abroad. With My File Tax, registering a Sole Proprietorship Firm is simple, affordable, and efficient! In addition to Sole Proprietorship Firm Registration, we also provide expert assistance for Private Limited Company Registration, Public Limited Company Registration, Partnership Registration, HUF, One Person Company, and LLP Registration.

Have any Questions?
Call us Today!

+91 72074 46677

kbharathca@gmail.com

Cost for Sole Proprietorship Registration

Simple Prices | No Surprises

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ESSENTIAL

₹ 1699/-
(All Inclusive)

  • SSI/MSME Registration
Choose Plan
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ENHANCED

₹3299/-
(All Inclusive)

  • SSI/MSME Registration
  • GST Registration
Choose Plan
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ULTIMATE

₹20299/-
(All Inclusive)

  • SSI/MSME Registration
  • GST Registration
  • Accounting and Book-keeping (up to 500 transactions)
  • Income Tax filing upto turnover of Rs. 50 Lakhs
  • GST Returns for one year (GSTR 3B and GSTR 1)
Choose Plan

Compliance required by Proprietorship firm

All you should know about compliance of Proprietorship firm

GST Registration

GST registration is one way to establish your Sole Proprietorship Firm. If your annual turnover exceeds ₹40 lakhs or if you operate an online business (selling through platforms like Amazon or Flipkart), you must register under the Goods and Services Tax Act.

GST Return

The proprietorship firms registered under GST are required to file the GST return on a monthly, quarterly, and annual basis. A GST return is a document that contains the details of the taxpayer's income. The filing of GST returns is mandatory for all registered taxpayers, including partnership firms.

MSME Registration

You can also register as a Small and Medium Enterprise (SME) under the MSME Act. Although not compulsory, MSME registration offers numerous benefits, especially when seeking business loans. Obtaining Udyam Aadhar Registration can further enhance these benefits.

Accounting

While a Sole Proprietorship does not require a separate set of accounting records since the owner and business are considered one entity, maintaining records of business activities is advisable to assess profitability and manage finances effectively.

IT Return

Sole Proprietorships with taxable income exceeding the exemption limit must file income tax returns. In some cases, a tax audit may also be necessary. The tax filing process for a proprietorship is similar to that of individual income tax returns.

Tax Audit

A Sole Proprietorship is required to undergo a tax audit if its annual turnover exceeds ₹1 crore or if gross receipts from a profession exceed ₹50 lakhs. The tax audit ensures compliance with the Income Tax Act regulations.

Documents Required for Proprietorship

Quick Checklist

  • Photograph
  • PAN Card
  • Aadhar card
  • Electricity Bill or any other utility bill for the address proof

    • Key features of Sole Proprietorship Firm

    Points to make your decision easy

    Decision Making

    In a Sole Proprietorship, the owner has complete control over all business decisions. This direct control ensures faster decision-making and quicker execution of business strategies, allowing for more efficient operations and immediate adjustments.

    Easy to Start

    Starting a Sole Proprietorship is straightforward and quick. You can obtain a Registration Certificate within just 1 working day. Additionally, the process for GST registration is simple and fast, enabling you to get your business up and running with minimal delay.

    Easy to Close

    Dissolving or selling a Sole Proprietorship is relatively simple. There are no complex legal procedures or regulatory requirements for closing the business since there is no legal distinction between the proprietor and the firm.

    Tax Benefits

    A Sole Proprietorship offers significant tax advantages. The business income is taxed as personal income, not corporate tax rates, which can result in substantial tax savings. You do not need to file a separate business tax report, simplifying the tax process.

    Self-Employment

    As the owner of a Sole Proprietorship, you are self-employed, creating opportunities for personal growth and business development. Being the sole decision-maker also reduces the risk of business secrets being leaked and allows you to manage your business efficiently.

    Inexpensive

    Registering a Sole Proprietorship is cost-effective compared to other business structures. With minimal compliance requirements and low registration costs, it remains an affordable option for both starting and maintaining your business in the long run.

    How to start Sole Proprietorship?

    5 Easy Steps for Sole Proprietorship Registration

    Registrations for Proprietorship firm

    All you need is Aadhar and PAN card to get started. You can choose any name of your choice. However, this should not be an existing name in the Trademark Registry. Based on your documents and discussion with you, our experts will guide you as to what registrations to obtain.

     

     

    Udyog Aadhar Registration

    Udyog Aadhaar is a registration for all micro, small and medium-sized businesses. Udyog Aadhaar registration along with a tax registration may be used for the opening of bank account. Trough this various subsidies from government can also be enjoyed.

     

    GST Registration for firm

    As per the nature of business and requirement, Our team will process for GST registration in the name of your sole proprietorship firm. For this you will need to provide some documents like aadhaar card, PAN card etc. This certificate will help you open a current bank account easily.

     

    FAQs On Business Plan Preparation

    Any individual who is at least 18 years old and has a valid PAN card and Aadhar card can start a Sole Proprietorship. There are no specific qualifications or restrictions based on profession or business type, making it a popular choice for many entrepreneurs.

    Sole Proprietorships are commonly used for various types of businesses including small retail shops, freelancing services, consultancy services, sole traders, online businesses, and local service providers. Examples include graphic designers, local grocery stores, tutors, and freelancers.

    The incorporation process for a Private Limited Company in India typically takes 4-5 working days from the date of submission of all required documents and forms, provided there are no issues or delays in the approval process.

    To open a current account for a Sole Proprietorship, you typically need the following documents: PAN Card of the Proprietor Aadhar Card of the Proprietor Proof of business address (such as a utility bill or rental agreement) Business registration documents (if available) GST Registration Certificate (if applicable)

    If you wish to convert your Sole Proprietorship to a Private Limited Company or LLP, you will need to follow a legal process which involves registering the new entity and transferring the business assets and liabilities. Our team at Chaahna Associates can guide you through the entire conversion process and ensure a smooth transition.

    Once you register your Sole Proprietorship, you need to comply with several ongoing requirements, such as filing GST returns if registered, maintaining proper accounting records, and filing income tax returns annually. It’s important to stay updated with any additional legal or regulatory requirements related to your specific business.

    Chaahna Associates provides Sole Proprietorship registration and related services across various cities in India. Whether you are in Bangalore, Delhi, Mumbai, Chennai, Hyderabad, or any other major city, we are here to assist you. Contact us at +91 72074 46677 for more information on our services in your location.

    About Us

    At My File Tax, we simplify complex legal, financial, and compliance requirements for businesses and individuals. Whether you’re starting a new venture, managing existing operations, or ensuring regulatory compliance, we’ve got you covered. From company registrations (Private Limited, LLP, OPC, and more) to GST services, trademark registrations, accounting, and payroll management, our expert team ensures seamless execution tailored to your needs.

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