When a business or organization is managed and governed by one person it is called a sole proprietorship company or firm. In this proprietary organization of business, one person takes care and controls the overall operation and functioning of the business.
Why Should You Register For A Sole Proprietorship?
A Sole Proprietorship provides maximum privacy to its owners and has an
easy establishment and operational process.
Benefits of Sole Proprietorship
The benefits of Sole Proprietorship Firm is given below:
The sole proprietorship does not require specific registration, but the employer is advised to obtain certain essential registrations for the better operation of the Company. The registrations that are necessary are as follows-:
- MSME Registration – Getting a MSME (Small and Medium Enterprise) registration is not mandatory, but it does improve business credit opportunities and help with other legal matters. MSME can be registered through the online registration process on the official MSME website. It is a simple process and makes it easy for the sole proprietor.
- Shop and Establishment Act License – The Shop and Establishment Act license is not compulsory for all sole proprietorships, but most companies must obtain this license in accordance with local laws in the business area. The shop and installation license is issued by the Municipal Party. This license is granted based on the number of employees working in a company. The registration process is state-wise and business owners should check the website of specific states for registration.
- Goods and Services Tax (GST) Registration – Goods and services tax registration is required if the annual turnover exceeds Rs 40 lakh and Rs.20 lakhs for business in Northeastern States. A GST registered number is also required if the business owner wants to sell products online on e-commerce portals such as Amazon, Flipkart, eBay and more. It is imperative to note that GST registration is not mandatory for sole proprietorships. Obtaining GST registration helps the business owner to manage his tax during all the transactions that take place in the name of the ownership company
- Office Address Proof – A registered office address proof is important for several procedures which are crucial for the functioning of the business. If the office is on rental property, a lease agreement and an NOC from the office landlord can be used as proof of office address. If the founder has an office, the electricity bill issued by the office ownership or the municipal corporation or other office ownership papers can serve as proof of office address.
Checklist (Documents Required)
The following listed are the documents needed for obtaining Sole Proprietorship Registration:
- PAN (Permanent Account Number) Card
- Aadhar Card
- Bank Account
- Registered Address Proof
Moreover, a Sole Proprietorship Firm does not need any specific registration. However, in order to run a business smoothly and with ease, the owner of the business is required to get registered under the following listed:
- GST Registration
- MSME Registration
- Registration under the Shops and Establishment Act