Sole Proprietorship Registration in 7 Days

What is a Sole Proprietorship?

A sole proprietorship is a type of business owned and operated by a single individual. This is a popular choice for small businesses and individual entrepreneurs because it’s simple to set up and manage. In India, the owner handles all profits and taxes under their name or a trade name. This business type is especially favored by small merchants and traders due to its straightforward nature and quick setup process, usually taking around fifteen days.

Key Characteristics of a Sole Proprietorship

1. Single Ownership: Managed by one person.
2. Quick Incorporation: Can be set up within fifteen days.
3. Alternate Registration: Identified through GST registrations, not formal business registration.
4. Unlimited Liability: The owner is personally liable for all business debts.
5. No Perpetual Existence: The business doesn’t continue if the owner passes away or decides to stop the business.

Checklist for Sole Proprietorship Registration

1. Certificate/License: Issued under the Shop & Establishment Act by municipal authorities.
2. Professional License: Such as a Certificate of Practice from the Institute of Chartered Accountants of India.
3. Government Documents: Registration or licensing documents from Central or State Government authorities.
4. IEC Code: Importer Exporter Code issued by the Directorate General of Foreign Trade (DGFT).
5. Income Tax Returns: Complete and authenticated by the Income Tax Authorities.
6. Utility Bills: In the name of the business, such as electricity or water bills.
7. GST Registration/Certificate.

Compliance Requirements for a Sole Proprietorship

1. Income Tax Returns: File a personal income tax return using ITR-3 or ITR-4.
2. GST Returns: File monthly or quarterly GST returns if registered under GST.
3. TDS Returns: File quarterly if you have employees or significant expenses.

Benefits of Sole Proprietorship

1. Easy Setup: Minimal formalities and quick registration.
2. Full Control: The owner makes all business decisions independently.
3. Tax Benefits: Business income can be claimed on the owner's personal tax return.
4. Low Cost: Less expensive to operate compared to other business forms.
5. Minimal Compliance: Fewer regulatory requirements and formalities.
6. Flexibility: Great operational and managerial flexibility.

Steps to Register a Sole Proprietorship with Taxtrix

Professional Guidance

• Expert Advice: Taxtrix provides professional guidance on various processes, including service tax, sales tax, import/export code, and professional tax registration.

Vendor Relationship

• Application Booking: Connects you with reliable vendors to book your application and keep you updated on its status.

Registration Timeline

• Quick Process: Complete assistance for registration within 5 to 15 business days, depending on the task and authorities involved.

1. Easy Setup: Minimal formalities and quick registration.
2. Full Control: The owner makes all business decisions independently.
3. Tax Benefits: Business income can be claimed on the owner's personal tax return.
4. Low Cost: Less expensive to operate compared to other business forms.
5. Minimal Compliance: Fewer regulatory requirements and formalities.
6. Flexibility: Great operational and managerial flexibility.

How to Check Sole Proprietorship Status

Unlike registered companies, sole proprietorships do not have a centralized registration portal like the MCA. To verify the status of a sole proprietorship, you can use the following methods:

1. GST Portal: If the sole proprietorship is registered under GST, you can check the status on the GST portal using the GSTIN.
2. Local Municipal Authority: Verify registration status through the local municipal authority where the business is registered under the Shop & Establishment Act.
3. Bank Verification:: Contact the bank where the proprietorship has a current account to verify business status and activity.
4. Professional Tax Department:: For businesses required to pay professional tax, check with the respective state’s professional tax department.
5. Utility Bills:: Review utility bills (electricity, water, etc.) issued in the business’s name to confirm ongoing operations.

Documents Required for Registering a Sole Proprietorship

• Identity and Address Proof: PAN card and KYC documents.
• Business Address Proof: Rental agreement or sale deed.
• Utility Bills: Electricity, water, and telephone bills in the business name.

Opening a Current Account

• Business Proof: Documents proving the existence of your business.
• Registration Certificates: Shops & Establishments Act Registration.
• Identity Documents: PAN card and address proof.

Sole Proprietorship vs. Other Business Types

A sole proprietorship is an ideal business structure for small businesses with limited capital and resources. It offers simplicity, full control, and cost-effectiveness, making it a popular choice among individual entrepreneurs.

Why Choose Taxtrix?

• Access to Experts: Reliable professionals to meet all legal requirements.
• Seamless Process: Handles all paperwork for a smooth registration process.
• Experienced Team: Over 300 business advisors and legal professionals ready to assist you.