Are you planning to avail Sole Proprietorship Registration for your new business? If yes, then wait for a few minutes. There are many elements that you should surely know before enrolling your firm or shop as this particular business entity.
You should fully understand what sole proprietorship, actually means, what are the advantages and disadvantages it offers, and more. So, in this blog, we have covered the following topics:
- Definition of Sole Proprietorship
- What is meant by Sole Proprietorship Registration?
- Advantages of registering your business as Sole Proprietorship
- Disadvantages of Sole Proprietorship enrolment
- Documents required for Sole Proprietorship Registration
- Things to be done after obtaining Sole Proprietorship Registration
Definition of Sole Proprietorship
Sole Proprietorship is neither a company nor a corporation but a business exclusively owned by an individual. If a person owning any products or services starts selling it, then he/she becomes a sole proprietor of that particular business.
What is meant by Sole Proprietorship Registration?
Sole proprietorship registration is a process of enlisting your small business as a sole proprietorship. The motive is to open a current bank account and start a business of own.
The registration process is completely online. For the same, the desirous person will require to start with a few basic requirements such as having a Current Bank Account on the name of the business to support the ease of doing business.
In India, it's easy to start a sole proprietorship with less compliance and less costing. You can register your sole proprietorship business under any of these:
- Shop and Establishment Registration under the laws of the respective states
- Registering as SME
- GST Registration
Many people tend to confuse sole proprietorship with one person company limited. However, there’s a huge difference between a sole proprietorship and One Person Company.
Advantages of registering your business as Sole Proprietorship
When you register your business as a sole proprietorship, you don't have to keep much compliance into considerations. You're the sole owner of the business, and hence, there's no involvement of anybody else in your business. Likewise, sole proprietors can avail many such benefits as follows:
- Flexible operations;
- Record keeping is the least;
- Business secrecy is maintained;
- You don't need to wait for anybody else' opinion;
- You are free to make decisions, and can take prompt action;
- Lowest tax rates;
- Own accountability;
Similarly, there are a plethora of benefits that sole proprietorship business offers.
Disadvantages of Sole Proprietorship Enrolment
Undoubtedly, it has many advantages to offer. But everything comes with a negative impression as well, and hence, a sole proprietorship is no exception. It, too, has many disadvantages among which the major of them are as follows:
- If the business fails, the personal assets of the owner can be seized by the court;
- Because of unlimited liability, banks, investors, and other financial institutions fear to provide any loan;
- Limited resources are available;
- Because of the lack of competent people, things may lead to mismanagement and poor decision;
- Lack of expert eye in the business, etc.
Documents required for Sole Proprietorship Registration
Like fewer compliances, there's a requirement of just a few documents as follows:
- An Aadhaar card;
- A PAN card;
- Current Bank Account; and
- Registered office proof.
There's no specific law that governs sole proprietorship. For sole proprietorship registration process, click here.
Things to be done after obtaining Sole Proprietorship Registration
Once you have registered your business as a sole proprietorship, then you need to keep following things into mind:
- You should comply with GST Registration rule for Proprietor;
- You can avail MSME registration benefits;
- During GST registration, use HAC/SAC carefully;
- Subscribe with Enterslice services, the best consultant in the market, for GST Returns Monthly / Quarterly
- Club your all business and other income in your Personal income tax return.
Hence, if you're planning to set up your business as a sole proprietorship then do keep the advantages and disadvantages into consideration. If you think you should definitely go with it, then get the Sole Proprietorship Registration done to avail the advantages being offered. Contact Enterslice. We will help you with the easy registration and do it in the least possible time.