A sole proprietorship is a form of business ownership in which the proprietor not only has the legal right to maintain ownership of the company but is also fully accountable for its management and administration. In addition, a sole proprietorship does not have its own unique legal and financial identity that is different from that of the owner. Because of this, legal registration of the proprietorship is not required, and the proprietor's personal bank account may be used for all business-related activities instead of a separate corporate account. As a result, the owner is entirely responsible for the obligations owed to the company and must come up with the funds to satisfy such obligations out of his own pocket. The life span of a proprietor cannot be greater than the duration of the existence of the proprietorship.

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Key decisions to be made while setting up a Proprietorship
 

• What is the name of the business entity?

• How much money is to be put into the investment?

• What is the total amount of the proprietorship's authorized capital?

• What kind of commercial endeavors does the proprietorship plan to engage in?

• What is the proprietorship's official address for doing business?

• Should the proprietorship participate in the MSME registration?

 

Checklist for Proprietorship Registration

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Because there is no need, under any law, that a proprietorship be incorporated, the process of registering a proprietorship in India is quite straightforward and uncomplicated. It is sufficient for a single individual to own the company, serve as manager, and exercise complete control over the firm. However, some laws set constraints on a proprietor, and they have been described in the table below along with other minimal criteria for proprietorship business registration. These requirements and conditions are listed in order from most stringent to least stringent. Even though it is not needed to register as a proprietorship, it is still required to complete all of the essential tax registrations, just like any other company that is functioning in India.

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Documents Required for Sole Proprietorship Registration

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Although registration as a proprietorship in India is not required by any particular legislation, it is still necessary to get several additional tax and legal registrations, just as is the case with any other kind of company. Among them are the creation of a bank account, the finalization of a registered office location, the registration for GST, the registration for Professional tax (if applicable), the registration for Shops and establishments, and the registration for MSME. The following table is a list of the papers that are necessary for completing proprietorship registration in India. These documents are needed for all of the registrations that have been stated above.

• 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).

• A.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.