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The sole proprietorship is the simplest business form under which one can operate a business. The sole proprietorship is not a legal entity. It simply refers to a person who owns the business and is personally responsible for its debts. A sole proprietorship can operate under the name of its owner or it can do business under a fictitious name. The fictitious name is simply a trade name--it does not create a legal entity separate from the sole proprietor owner.
There is no mechanism provided by the Government of India for the registration of a Proprietorship. Therefore, the existence of a proprietorship must be established through tax registrations and other business registrations that a business is required to have as per the rules and regulations. For instance, GST Registration can be obtained in the name of the Proprietor to establish that the Proprietor is operating a business as a sole proprietorship. Thus, all the registrations for a proprietorship would be in the name of the Proprietor, making the Proprietor personally liable for all the liabilities of the Proprietorship.
Legal Entity Proof for the Sole Proprietorship Registration in India :
Option 1 : MSME Registration Certificate .
Its applicable in below conditions -
#1 deals within the state Only. (Ex Delhi to Delhi)
#2 within state expected turnover or sales less than 20 lakh rupees.
Option 2: Shop And Establishment act
Shop and Establishment Act is covered under state legislation and each state has framed its own rules and regulations for the same. Since rules are framed by the state government, rules will differ from state to state
Option 3 : GST Registration Certificate as Proprietorship Entity
Its applicable in any ONE conditions below -
#1 deals inter-state sales or services. (Ex Rajasthan to Delhi)
#2 Ecommerce or internet based business.
#3 Trader or Retailer or Mfg or Aggregator
#4 Within state have more than 20 lakh rupees turnover.
So above is your first step to choose the right legal entity certificate to register your proprietorship firm registration.
hbfdirect.com is a leading legal consultancy firm providing comprehensive services relating to incorporation. Our expert team will provide you full-fledged assistance required for the seamless registration of sole proprietorship firm.
Basic Documents & Information 1-2 Days
Application Drafting 3-4 Days
Review & Changes 5-6 Days
GST Registration 7 to 10 Days
No, you can register on your residential property also, whether its a rented or own property. you need just utility bills copy with permission from your landlord or owner of the premise.
The legal identity of sole proprietorship and is the owner is considered as one under the Indian tax laws. Due to this the profits and loss of the business are considered as the profits and losses of the individual. Thus the tax provisions for sole proprietorship firm are completely similar to the tax provisions of the individual.
The liabilities of the sole proprietors are unlimited as they and their sole proprietorship firm is considered as single entity thus the sole proprietors are personally liable to clear the liabilities of the company.
The sole proprietorship is the easiest and least expensive type of business to start. Moreover, the sole proprietors can enjoy the sole control over the working of the company.