One of the toughest things for an entrepreneur is going through the legal processes. The whole legal trauma starts right from registration of the validated idea as a company.
In this article, we will be talking about chances of an entrepreneur considering registering as a sole proprietor and save time by not going through the hassle of the whole legal process.
A Thorough Guide On Registering a Sole Proprietorship in India:
A sole proprietorship is a form of business which is controlled, managed, and owned by one. It is one of the most popular options in India while registering a business; it accounts for more than 15% of registered business in India and also provides owners with certain tax benefits. You can also do Proprietorship Firm Registration.
Moving ahead, here are the list of pros and cons of registering as a sole proprietor –
- Full control – You settle on all the business choices, which settle on the basic leadership process brisk, simple and powerful.
- Tax breaks – Sole Proprietorships are saddled at singular rates of tax collection instead of corporate rates.
- The simplicity of management – a sole proprietorship is without a doubt the least demanding type of business as far as enrollment and beginning up.
- Fewer consistence necessities – A sole proprietorship requires a minimal measure of legal and financial compliances when contrasted with some other legal element. Not exclusively does this spare you a colossal measure of cash, yet in addition an extraordinary measure of exertion and time
- Unlimited liability – Since the business and proprietor are viewed as the same, the liability of your business is adding your own liability.
- Trouble in interminable progression – Since your business is yours alone, it’s hard to pass it on or exchange ownership.
- Limited Resources – Since all the capital originates from you, this can be constraining.
- Investors/Funding – on the off chance that you intend to raise outside obligation or value, you may need to change over your Proprietorship to a Private Limited, as that is the favoured element writes by most investors and lenders.
We will also guide you through the process of registering under sole proprietorship. Here the steps that are necessary to be taken while registering the business –
- GST Registration –
You can get your business enlisted with New GST Registration to have a proprietorship recognition from the administration. In a perfect world, this is a prerequisite for all businesses that have a turnover of more noteworthy than INR 20 lakh a year. In any case, GST enlistment can be acquired by any business in India
- Local License –
A local license can likewise be gotten to get Proprietorship recognition. Also, this license will vary as per the idea of your business.
An extra identification as a sole proprietorship can likewise be gotten on the off chance that you have a bank account in your business’ name. You will require a local license issued by your local government to begin a bank account and be formally enlisted as a sole proprietorship. You will require at least two of the accompanying. Notwithstanding, take note of that some private banks have diverse arrangements, so you might need to check their prerequisites and settle on those.
MSME Registration – This is the most generally acknowledged enrollment and is very simple to petition for. This enlistment offers different advantages to little and medium businesses.
A license issued by a Registering Authority – Registering authorities can issue a Certificate of practice. This incorporates ICAI (contracted bookkeepers), ICSI (organization secretary), Indian Medical Council, Food and Drug Control Authorities, and so forth. These licenses are very particular to your business. For instance, in the event that you are in the sustenance business, the FSSAI license is required for your business. Be that as it may, in the event that you are into attire, none of these are required.
Shops and Establishments Act – This license is issued by the municipal authorities and is required to have a business foundation or formal place of business. A Shop Act License is required to open a shop or an office.
Income Tax Returns – Complete ITR forms, where all points of interest are properly validated and recognized by the Income Tax Authorities
Final Words –
Registering as a Sole proprietor might be easy and seem with little or no hassle but if you have a company with big dreams/vision, you would have to get registered under other forms. If you are still insisting on Sole Proprietorship, then you might also have to go with further registrations as per the nature of the business. If we have missed any point then you can comment and contribute.