Introduction

A business owned and governed by an individual is called a sole proprietorship company. A sole proprietorship is a more favoured and simple way to start a business in India, and there is no legal difference between the owner and the business. Few examples of proprietorship businesses are shops viz. chemist, salons, and grocery. Simple, easy, and shorter incorporation cycle (around 15 days) and the nominal cost of incorporation make it preferable and popular among merchants and small traders. Sole Proprietorship does not require registration as GST and other alternate registrations recognize Sole Proprietorship. Liability of Sole Proprietorship is unlimited with no permanent existence.

Advantages of running a Sole Proprietorship

Sole Proprietor can enjoy the rights provided to a registered legal company and can be run by anyone who wants to sell his/her products or services. Most of the businessmen find it as an ideal business entity and have registered their business under it. The company's loss of profit or income is the individual's loss under the Income Tax Act. Registering a sole proprietorship business is currently an online process. One can use the services of an expert too. 

Advantages of a sole proprietorship are flexibility in running business activities, simple business structures, single-hand control, easy to start and close limited compliance requirement, and self- accountability. Benefits of a Sole Proprietorship Firm are individual investment and ownership, no profit sharing, fewer formalities, and control of power business.

Essentials of a Sole Proprietorship Registration

• A certificate or license issued by Municipal authorities under the Shop & Establishment Act and license issued by Registering authorities (e.g., Certificate of Practice).
• Central Government or the State Government Authority or Department issues the registration or licensing document. The DGFT issues an Importer Exporter Code (IEC), which is needed to open the bank account (Banks may also accept it).
• Completed Income Tax return, authenticated and acknowledged by the Income Tax Authorities.
• The utility bills (electricity, water, and the landline telephone) and GST Registration or Certificate.

The Documents Required for Registration

For starting a Sole Proprietorship, the documents required are Address and Identity Proof, PAN card, KYC documents, and Rental agreement or sale deed (in case of registration under Shops & Establishment Act).

The Documents Required for Opening a Current Account

For opening a current account, the documents required are- proof of business, Shops & Establishments Act Registration, PAN card, Address, and Identity proof.

This Article Does Not Intend To Hurt The Sentiments Of Any Individual Community, Sect, Or Religion Etcetera. This Article Is Based Purely On The Authors Personal Views And Opinions In The Exercise Of The Fundamental Right Guaranteed Under Article 19(1)(A) And Other Related Laws Being Force In India, For The Time Being.