Sole Proprietorship

FilingMan offers comprehensive assistance in establishing and managing Sole Proprietorships, simplifying the process for aspiring entrepreneurs.

    About Our Service

    A sole proprietorship is the prevailing choice of micro and small businesses in the unorganized sector. It is distinguished by its ease of starting and its low regulatory compliance requirements. A proprietorship business is one that is owned, run, and controlled by a single person, as the name suggests. Given that it does not provide benefits like limited liability, corporate status, or a separate legal body, it is especially well-suited for tiny and disorganised firms.

    A variety of company registration services are offered by FILINGMAN, including private company registration, OPC, Section 8 Company, and others. Depending on how quickly the necessary documents are processed and submitted, the proprietorship registration procedure normally takes 3-5 working days.

    FilingMan is your trusted partner in establishing a Sole Proprietorship, providing seamless solutions to embark on your entrepreneurial journey. With a comprehensive understanding of the legal and procedural requirements, FilingMan simplifies the process, allowing you to focus on your business vision. Our dedicated team assists in obtaining necessary licenses and registrations, including GST registration and opening a bank account, ensuring that your Sole Proprietorship operates within the bounds of legal compliance.

    Features of Sole Proprietorship

    1. A business structure known as a sole proprietorship involves just one person controlling and running the entire company.
    2. The owner has complete control over the company and is responsible for all of its debts and liabilities.
    3. The owner is solely in charge of financing the company and retains exclusive ownership rights to any revenues generated.
    4. The easiest and most popular type of business organisation is the sole proprietorship.
    5. Small enterprises and independent contractors find it to be popular.
    6. A sole proprietorship can be established without difficulty and with a minimum of paperwork and compliance with regulations.
    7. However, because sole proprietors are subject to limitless responsibility, the debts and liabilities of the business may be paid out of personal assets.
    8. In terms of management, marketing, finances, and operations, sole proprietors are accountable for all aspect of their organisation.
    9. While this gives them total control over the company, it may also need that sole owners put in a lot of work and play many responsibilities to make sure the company is successful.
    10. A good option for those looking to start a small business or work for themselves as professionals is the sole proprietorship.

    Registrations & Licenses

    In order to run a business as a proprietor in India, the owner requires both an Aadhaar card and a PAN (Permanent Account Number). Additionally, they need to open a current bank account for business activities and secure necessary registrations including GST (Goods and Services Tax) registration and UDYAM registration, which was formerly known as MSME registration. In some states, the proprietor may also need to register under the Shops & Establishments Act.

    Depending on the industry, the state, and local laws, extra licences and permits may be required in addition to these core necessities. These rules must be followed to ensure compliance with legal requirements and industry-specific regulations.

    Obligations of a Proprietorship

    Filing Income Taxes:

    As a proprietorship business owner, it is mandatory to file personal income tax returns using either Form ITR-3 or ITR-4. This ensures compliance with the income tax regulations and obligations applicable to sole proprietorships.

    Business Earnings:

    Sole proprietorships must file Form ITR-3 or ITR-4, which are the specific income tax forms designated for reporting business income, in order to properly declare business income. To ensure compliance with income tax laws, it is crucial for all proprietorships to meet this compliance requirement.

    Filing a GST Return :

    A proprietorship must submit monthly or quarterly GST returns, depending on the specific scheme selected during registration, if it has registered for the Goods and Services Tax (GST) programme. The proprietorship will be in conformity with GST laws if it complies with this condition.

    Returning TDS:

    Tax at source (TDS) deductibility becomes required for sole proprietorships with employees or those making sizable purchases of goods or services. Therefore, to comply with tax requirements, TDS returns must be filed periodically.

    Additional compliance standards could also be applicable to the proprietorship, depending on the particular industry and area. To fully comply with the applicable laws and regulations, it is necessary to recognise and carry out these industry- and location-specific responsibilities.

    Registration Process

    Step 1: Determining the Method of Establishing Sole Proprietorship

    Our expert team of Filingman will assist you in determining the best strategy to establish the legitimacy of your single proprietorship and make it easier to obtain a business bank account. As there is no particular way to incorporate a sole proprietorship, the process will be customised on each individual basis.

    Step 2: Registration

    Once a name has been selected, the sole proprietorship's identification can be verified by applying for GST registration or SSI/MSME registration.

    Essential Documents

    Aadhar card of the owner

    PAN Card of the Owner

    Bank statement

    Registered office proof: if the property is rented, the rent agreement and landlord's NOC; if it is owned outright, an electricity or water bill.

    Sole Proprietorship Costs

    Sole Proprietorship

    ₹ 2,499 / Only

    Plus Government Fees, Stamp Duty Extra.

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      Benefits of Sole Proprietorship

      Simple Registration

      Because the proprietor and the business are regarded as one, sole proprietorships do not require a formal incorporation or dissolution process. To ensure compliance with Indian rules and regulations, the owner may need to secure particular registrations and licences in order to legally operate the firm.

      Minimal Compliance

      Since proprietorships frequently file with just one government agency, including the Income Tax and the GST, their compliance needs are typically minimal. Comparatively, organisations like LLPs and Companies must file several statutory returns and submit to annual audits by Chartered Accountants. These organisations must also be registered with the Ministry of Corporate Affairs.

      Ease of Management

      The proprietor can effectively manage the business with the least amount of paperwork and approval procedures if there are no partners, shareholders, or directors present. As a result, relatively tiny businesses are especially well-suited for this type of organisational structure.

      Independent Decision-Making

      In a sole proprietorship, the business owner maintains total discretion over all corporate decisions. There is no requirement for the approval or consent of anyone else. Owners thus have the freedom to act quickly in reference to their corporate operations.

      Total Ownership and Control

      In a sole proprietorship, the owner has complete control over the company's assets, earnings, outgoings, and all other areas of operations.

      Why Choose FilingMan

      For Sole Proprietorship?

      FilingMan offers ongoing support to nurture your Sole Proprietorship's growth. From compliance management and tax filings to advisory services, our experts ensure that you navigate the regulatory landscape effortlessly. FilingMan's commitment extends to empowering you with insights into optimizing your business operations and financial strategies, enabling your Sole Proprietorship to thrive in a competitive market. By choosing FilingMan, you gain a reliable partner dedicated to helping you establish, operate, and expand your Sole Proprietorship with confidence and success.

      Sole Proprietorship FAQ'S

      How does a sole proprietorship vary from other business models and what does it mean to be one?
      A sole proprietorship is a company owned and run by a single person who is completely accountable for every aspect of the company. In contrast to other business forms like partnerships and corporations, where there are several owners with shared obligations and liabilities, this one does not have this arrangement.
      What benefits come with establishing a sole proprietorship?
      The main benefits of a sole proprietorship are their simplicity in starting up, inexpensive initial costs, total control over business decisions, flexibility in operating the company, and easy tax reporting as business income is reported on the owner's personal tax return.
      What are a sole proprietor's obligations under law and in terms of money?
      In a sole proprietorship, the owner is personally liable for all debts and legal responsibilities incurred by the business. This implies that in the event of company liabilities or legal actions, personal assets may be at danger.
      What must be registered in order to form a sole proprietorship?
      In general, forming a sole proprietorship involves few requirements. The owner may need to register the business name if it is different from their legal name, receive any required licences or permits for the business activity, and adhere to local laws depending on the jurisdiction.
      Can a sole proprietorship later change to another type of business structure?
      As a business develops and grows, it is possible to transform a sole proprietorship into another legal form, like a partnership or corporation. Depending on the new business structure and local legislation, this conversion may include more formalities and legal procedures.