Overview of Sole Proprietorship
A sole proprietorship form of business is a common business structure in India. A sole proprietorship business is establish and managed by a single person. This type of business form is best suitable for individuals wishing to start a business with less investment. Generally, it does not require any registration as such.
A sole proprietorship business can be started from home or on a premise with a minimum amount. The control of the business is solely in the hands of the single proprietor/owner who invests in the business. He bears all the losses of the business and enjoys all the profits. He can appoint persons for conducting the business, but the ownership will rest solely with him.
Many local businesses such as grocery stores, beauty Parlour, boutiques, retail stores, etc., can be established as a sole proprietorship firm. Even small traders and manufacturers can establish a sole proprietorship firm.
Eligibility criteria for Sole Proprietorship in India
- Applicant must be a tax-paying citizen – Online sole Proprietorship firm registration is only for entities running a local business. If you do, only then can you start a proprietorship firm. This business entity is deemed too free by the government of India, and therefore, only those from India can create this business entity.
- Applicant must obtain the GST registration for its Business – If the annual turnover of your Business is more than INR 40 Lakh, you must get the GST registration certificate in India. It will act as proof for your Business.
- Register a Bank Account in Proprietorship’s name – One criterion for sole proprietorship firm certification is to open a bank account in the name of your Proprietorship. It will help you conduct your business financial transactions properly.
Documents required to obtain an Sole Proprietorship
- PAN card of the proprietor
- Name and address of the business
- Bank account in the name of the business
- Registration under the Shop and Establishment Act of the respective state
- Registration under GST, if the business turnover exceeds Rs.20 lakhs
FAQs About Sole Proprietorship?
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