What is Sole Proprietorship Registration?
When single person runs a business then such kind of business is called as proprietary business, and the owner of the business is called as proprietor. Proprietorship is the most common form of the business which is used in India. You can start and operate the business with minimum regulatory compliance. However there is no full fledged way available to register your proprietorship by Indian Government. Tax registration and other business registration’s is the right way to show existence of your proprietary business. Following registrations can be used to show the existence of your proprietory Business
Professional Tax Registration.
GST Registration.
Shop and Establishment Registratio
The owner of a sole proprietorship business typically signs contracts in his or her own name, because the sole proprietorship business has no separate identity under the law. The sole proprietor owner will typically have customers write checks in the owner's name, even if the business uses a fictitious name. Sole proprietor owners can, and often do, mix personal and business property and funds, something that partnerships, LLCs and corporations cannot do. Sole proprietorships often have their bank accounts in the name of the owner. Sole proprietors need not observe formalities such as voting and meetings associated with the more complex business forms. Sole proprietorships can bring lawsuits (and can be sued) using the name of the sole proprietor owner.
Documents Required For Proprietorship Firm Registration.
To register a sole Proprietorship, minimum documents are required which are :
Aadhar card or any identity proof.
Self PAN card.
Business account (Current account).
Address Proof (Rent Agreement, Electricity Bill).
Benefits of Proprietorship Firms.
Proprietorship firms have several benefits for their owners. Some of these benefits are discussed in detail below:
Smooth Start
There is no elaborate registration process for the establishment of proprietorship firms. A proprietorship firm uses the owner’s legal identity. Due to this provision, there is no need to register the firm separately until it is necessary. This smooth registration process makes it easier for the owners to register their firms, which is beneficial.
Flexible Operational Strategies
Being the sole owner of a business, it is easier to understand and operate the same. The owner is the only decision-maker. Hence, the decision is made quicker and better for the company. One owner businesses have more straightforward operational functioning because there is the only person to create and implement plans for the business.
Undivided Profits
In proprietorship firms, there are no firm rules for the money earned by the business since there is only one owner of the company. The owner is the only person to accumulate the profits and further invest it in the market and other ventures. Sole ownership gets rid of the benefit related conflicts in the firm. Money comes in to facilitate and maintain the processes in the firm.
Taxation
Any sole proprietor is not entitled to pay income tax if the profits of the company are less than Rs. 2.5 lakh per year. This is a significant benefit for the firm to start small and save on taxes. However, it is essential to note that the firm has to pay income taxes once the profits exceed Rs. 2.5 lakh per annum.
These are some of the significant benefits of owning a sole proprietorship firm. Having a proprietorship firm can aid business loan applications which can help with investment capital for business.
