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Sole Proprietorship Registration

A sole proprietorship, also known as a sole trader or simply a proprietorship, is a type of business structure that is owned and run by one individual and in which there is no legal distinction between the owner and the business. The owner receives all profits (after tax) and has unlimited responsibility for all losses and debts. All assets and debts of the business in the proprietorship are owned by the proprietor. This means that the owner has no less liability than if they were acting as an individual instead of as a business.

A sole proprietor may use a trade name or business name other than his or her name. In India, there is no specific law for registration of sole proprietorship, but as per the Shop and Establishment Law (State Law), every establishment needs to get registered under the Act, which can be used as limited purpose sole proprietorship registration.

As the name reveals, a sole proprietorship is operated managed and run by a single individual. The identity of the organization is nothing but the individual himself. However, depending on the nature of business, it is required to obtain registration such as Professional Tax, GST, IEC, etc. A sole proprietorship can be registered under the MSME Act to avail benefits and protection.

The proprietorship business carries unlimited business risk as the business proprietor is individually responsible to settle all business liabilities. The proprietor’s personal assets are at risk to compensate the business liabilities.

Required Documents

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Color Photo of the Proprietor.

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Firm Name with Registered Office.

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Personal Proprietor Pan Card & Aadhar Card Copy.

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Valid Email-id & Contact Number.

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Name of Products / Services in which Your Firm is dealing.

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Saving Bank account statement/ First Page of Passbook/ cancelled cheque of proprietor.

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If Business Property is own provide Electricity or Legal Ownership Documents other wise Provide Rent Agreement.

Required Documents

Color Photo of the Proprietor.

Firm Name with Registered Office.

Personal Proprietor Pan Card & Aadhar Card Copy.

Valid Email-id & Contact Number.

Name of Products / Services in which Your Firm is dealing.

Saving Bank account statement/ First Page of Passbook/ cancelled cheque of proprietor.

If Business Property is own provide Electricity or Legal Ownership Documents other wise Provide Rent Agreement.

Step by Step Procedure of One Person Company Registration

STEP 1

Verification of documents provided by you.

STEP 2

Document Preparation.

STEP 3

Apply for proprietorship registration.

STEP 4

Sending you Proprietorship Firm Kit.

Frequently Asked Question

Is physical presence required during the process?

No, physical presence is not required. Scanned copies of all the required documents & forms will hold good to complete the procedure online. Also, we at gainme, always encourage faceless and paperless process in all our services. We also provide video/ audio call support at your convenience.

Who can be eligible to start a sole proprietorship?

Anyone in India having a valid PAN, is eligible to start a sole proprietorship business with or without registration (depending on the business type) provided, a bank current account is made available to make business transactions. Sometimes, Banks may require GST registration and Shops & establishments registration to open a current account with them.

What are the some common types of business that can be run through sole proprietorship?

Most of the local business who start business ad proprietor are small traders, manufacturers, and other small scale shop vendors.

What are the other mandatory registrations required to run the business?

GST Registration if the value of turnover exceeds Rs 40 Lacs (in case of goods) and Rs 20 lacs (in case of services).

How easy is it to convert a sole proprietor into a partnership/LLP/OPC/Private limited company?

It involves additional efforts and time to convert sole-proprietorship.html to other legal entity. However, gainme team will support and guide you in easy conversion to another legal entity.