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Know More About SOLE PROPRIETORSHIP REGISTRATION
Introduction and Its Compliance
A Sole Proprietorship is the simplest form of business structure owned and operated by a single individual. It is not a separate legal entity, meaning the owner and the business are considered the same for legal and tax purposes.
While it requires minimal compliance, certain basic registrations such as GST, UDYAM (MSME) and shop & establishment licenses may be needed depending on the nature and location of the business.
Why It Is Needed
A Sole Proprietorship is ideal for small businesses or individuals starting out with limited capital and low risk.
It allows for full control, quick decision-making and an easy setup process without complex formalities. It's often chosen by freelancers, consultants, local shops and individual service providers.
Benefits and Advantages
- Ease of Setup Quick, hassle-free and cost-effective setup with minimal documentation and no complex legal formalities.
- Full Control Complete decision-making authority and 100% ownership of profits.
- Minimal Compliance Fewer legal compliances and no mandatory separate business returns.
- Tax Benefits Income is taxed as personal income under individual slab rates, potentially lowering overall tax liability.
Eligibility Criteria
General Eligibility
- Any Indian citizen aged 18 years or older can start a sole proprietorship.
- There are no specific legal requirements for formation, but necessary licenses and tax registrations are required.
Documents Required
Proprietor
- Email and Mobile number
- PAN Card and Aadhaar Card of the proprietor
- Passport-size photograph
- Address proof (Bank statement, utility bill)
Business Address
- Electricity bill, rent agreement, and NOC (if rented)
Registrations (as applicable)
- GST registration
- UDYAM (MSME) registration
- Shop & Establishment License
Steps for Getting Registration
- Consultation and Assessment: Lawfinity experts help you decide the right set of registrations needed for your business.
- Document Collection and Preparation: PAN, Aadhaar, address proof and business details are collected and verified.
- Apply for Registrations: Applications for GST, UDYAM, and Shop License (if required) are filed.
- Open Bank Account: Use registration certificates to open a business current account.
- Ongoing Compliance: Lawfinity assists with GST returns, bookkeeping and other filings if applicable.
Timelines
Setup Time
3 to 7 working days
Timelines may vary depending on document verification and government approvals.
Fee
Frequently Asked Questions
Because every great business starts with the right answers.
There is no central registration, but licenses like GST, UDYAM or Shop & Establishment are required based on your business type.
Yes, the proprietor’s PAN is used for all business-related tax filings.
Yes, using your business registration certificates such as GST or UDYAM.
Only if turnover exceeds the prescribed limits under the Income Tax Act.
Yes, you can incorporate a company and transfer the business operations.
Only if your turnover exceeds ₹40 lakh (or ₹20 lakh for services) or you are involved in inter-state trade.
Yes, if your turnover crosses the prescribed limit under the Income Tax Act.
Yes, and applicable registrations like EPF/ESIC may be required based on headcount.
Income is taxed under the individual’s income tax slab as business income.
Voices of Success
Hear from those who have thrived with us and discover how businesses have transformed and grown with our expert guidance and support.
Anil Yadav
Shaperz India Grain Private Limited
“From FSSAI to Trade License, Lawfinity handled all our approvals efficiently. One-stop solution for all licensing needs.”
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