A sole proprietor is someone who works solely for themselves. He alone starts the company, sets up its finances, runs its operations, and takes all its risks. He manages his company while also serving as its owner. The company's gains and losses are entirely his responsibility. However, he may take out loans and hire employees to assist him; the final decision-making power and responsibility rest with him. Thus, a sole proprietorship is a one-person operation.
In this blog post, we will discuss the documents required for proprietorship company registration in India.
Formation Of Sole Proprietorship Business
One person makes an effort to start a sole proprietorship business. He draws out the company's plans and makes the required financial arrangements. There are no formalities needed to set up a sole proprietorship. Any person may begin at any time and wherever they like. The sole proprietor must have a valid licence to enter into a contract. The intended enterprise must be permitted by law. A licence from the relevant authorities may be required in specific circumstances to launch the firm. For instance, a person who wants to open a pharmacy/has to obtain a licence from the local government.
The choice of a specific business line is the first choice made when starting a sole proprietorship business. This product choice is based on the potential for demand, the accessibility of required resources, and the possibility of profit. Another crucial option is choosing the correct location. The requirements of customers and the nearness to the market should be considered while starting a proprietorship business. The size and scale of operations also have to be considered.
A sole proprietorship may end at any time and without official documentation. The owner only needs to close the business after paying off his creditors' claims.
COCA-COLA CORPORATION WAS ONCE A SOLE PROPRIETOR
On May 8, 1886, a local pharmacist named Dr John Stith Pemberton created the syrup and offered it for sale in Atlanta, Georgia, for five cents per glass (USA). Asa Candler purchased his company from him in 1888, shortly before he passed away. On May 1, 1889, Candler published a full-page advertisement in The Atlanta Journal announcing his company's wholesale and retail operation as "Sole proprietors of Coca Cola Candler Delicious, Refreshing, Exhilarating, Invigorating." Candler established a business known as the Coca-Cola Corporation only in 1892.
Documents Required For A Sole Proprietorship Registration
Following are the documents required for a sole proprietorship registration in India.
Aadhar Card:
In India, obtaining an Aadhar number is required to register for anything. A real copy of the Aadhar card is delivered to the registered address about 15-20 days after the application is submitted. Additionally, to file an income tax return, you must link your Pan card to the Aadhar number. If you don't yet have an Aadhar number, get in touch with your local E-Mitra or Aadhar Seva Kendra.
PAN Card:
Before obtaining a PAN, you cannot file your income tax return. You need a scanned copy of your photo, identification, and address documentation to apply. Apply for a PAN number as soon as possible if you don't already have one. Online PAN card applications cost roughly Rs. 110.
When the form is verified using Aadhar e-KYC, it can be submitted online. Following submission, the PAN card application is verified at NSDL, and if NSDL determines that the information is correct, it assigns the PAN number within 7-8 days. Additionally, the registered address receives a hard copy of the PAN card in 15 to 20 days.
Proof of Registered Office:
- A rent agreement and a landlord's NOC are required if you live on rent.
- Electricity bill, any other utility bill, or the sale document if it is a self-owned property.
Bank Account:
Once you have your PAN and Aadhar number, you can go to any bank to create an account there. It would help if you also had identification and address proof in addition to your Aadhar number and PAN. You must also present GST registration paperwork to the bank representatives to open a current account.
Registrations Required For A Sole Proprietorship
A few registrations are also necessary to prove the firm's existence in addition to the documents mentioned above:
Registering as SME
Under the MSME Act, you can register your business as a Small and Medium Enterprise (SME). The application may be submitted online even though it is not required. If you are registering your company as an SME, it has many advantages, particularly when applying for a company loan. For SMEs, the government administers several programmes through which loans are made available at a reduced interest rate.
Shop and Establishment Act License:
According to municipal regulations, a Shops and Establishment Act License is required to obtain. It is issued according to the type of company and the number of employees. Generally, this licence is mandatory for all sole proprietors who open a shop or other kinds of business.
GST Registration:
- If your annual turnover exceeds Rs. 40 lakhs, you can register for GST. Additionally, if you are conducting an online business (selling on Flipkart, Amazon, etc.), you must obtain a GST number. You need the following documents to register for GST:
- PAN card, picture, and owner's Aadhar card
- Evidence of a company location (rent agreement or electricity bill)
- Copied bank statement (first page for verifying bank account number, address, and IFSC code)
- The GST portal has made it simple to register for GST. Typically, you receive your GST number 3–4 days after submitting the application.
How can a Lawgical India assist you with this?
Given the registrations and regulations mentioned above, it is advantageous to enlist the aid of a knowledgeable company that can guarantee hassle-free delivery of the same. That is the essence of Lawgical India. We are a reputable company with more than three years of expertise in the licensing system. If you need any assistance regarding the registration of the Sole Proprietorship firm, then you may contact us anytime for help.
