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Sole Proprietorship

A sole proprietorship or a sole trader is a type of enterprise that is owned and managed by one person. Mainly small manufacturers and traders use this kind of structure.

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  • Right registration

    We will help you in selecting the right process of government registration.

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  • Receipt of Registration

    We will always be in touch until you receive the registration receipt.



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What is Sole Proprietorship?

A sole proprietorship or a is a type of enterprise that is owned and managed by one person. Mainly small manufacturers and traders use this kind of structure because it is quite easy to start with one as you can start running it within 15 days. There is no registration required for it. Proprietorships are generally recognised by a registration like GST registration. Ease in setting up comes with severe disadvantages like unlimited liabilities of the proprietor and it also does not have a continuous existence.



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Advantages of a Proprietorship


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Minimal Compliance

Sole Proprietorships just need to file annual filings for tax registrations, so the extent of their compliance is limited to minimal.


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Easy to Start

Mainly small manufacturers and traders use this kind of structure because it is quite easy to start with one as you can start running it within 15 days. There is no registration required for it. Proprietorships are generally recognised by a registration like GST registration. PAN card, identity and address proofs are more than enough to get them done.


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Relatively Inexpensive

A Sole Proprietorship is very less inexpensive than a One Person Company (OPC) because of minimal compliance requirements which in turn will be inexpensive in long-term as you do not have to hire an auditor.



Sole Proprietorship Registration Process


  • We will help you in selecting the right process of government registration whether service tax, sales tax, import/export code, professional tax or Shops and Establishments Act registration. You need to submit all the required documents to us.
  • We will help you in connecting with a verified vendor to file your application and keep you updated on its status. Our vendors are well-experienced and experts in their field.
  • We will always be in touch until you receive the registration receipt. It can take 5 to 15 days depending on the workload of authorities and the designated office.


FAQs on Sole Proprietorship

Any Indian citizen with a current account in the name of their business can start a sole proprietorship. Registration may or may not be required, depending on what business you are planning to establish. However, to open a current account, banks typically require a Shops & Establishments Registration.

To open a current account, you need proof of the existence of your business. Most banks will ask for a Shops & Establishments Act Registration. In addition, you will need a PAN card and address and identity proofs.

A sole proprietorship business does not take more than 15 days to open-up and get running. This simplicity makes it popular among the small traders and merchants. It's also much cheaper, of course. This is the other reason why it's the most widely used business structure.

Most local businesses are run as sole proprietorships, from your grocery store to a fast food vendor, and even small traders and manufacturers. This is not to say that larger businesses do not operate as sole proprietors. Even some jewellery shops are sole proprietors, but this is not recommended.

To start a sole proprietorship, you would need address and identity proofs, PAN card, all KYC documents and rental agreement or sale deed (in case of Shops & Establishment Act Registration).

This depends on the business you're in. It is compulsory for any business whose turnover in a financial year exceeds Rs 20 lakhs (Rs 10 lakhs in the case of North Eastern states) to get a GST registration. For businesses that are involved in selling goods or services to customers out of a commercial establishment, it is mandatory to register under Shops and Establishments Act.

The registrations controlled by the central government -- service tax, for example -- can be availed of online, whereas the state-government-controlled ones may or may not be.In some technologically advanced states, such as Karnata,they are,whereas in others they may not be.

You can always choose to do so. The procedure is a little tedious, but it is possible. It is very common for sole proprietors to convert into partnerships and private limited companies at a later stage.

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