Sole Proprietorship

What is a Sole Proprietorship Firm?


A sole proprietorship firm is a type of business entity that is owned ,managed and controlled by a single person. The owner of the Business is called Sole Proprietor of the Firm hence, he makes the decisions for the company. Under sole proprietorship all business transactions are done in the name of proprietor only. As the business is run by a natural person, there is no legal difference between the promoter and the business. The promoter himself receives all the profits.The micro and small businesses that are operating in the unorganized sector prefer registering as a proprietorship in India. It is very easy to start a sole proprietorship in India as it has lesser formation costs involved and very few regulatory compliances for conducting businesses. Proprietorship registration is ideal for the entrepreneurs who are getting into the business for small businesses with very few clients.Sole Proprietorship firm does not require any formal registration. Since its nothing other than the individual himself, the liability of the sole proprietorship is unlimited.


In Sole Proprietorship Firm Registration, the government of India has not prescribed any sole proprietorship firm rules and regulation in India or there is no registration mechanism for Sole Proprietorship Firm registration.Thus, the registration of a proprietorship can only be recognized through tax registrations that the business is required to have as per the rules and regulations.These tax registrations may include GST Registration and/or SSI/MSME / Udyam Aadhar Registration should be obtained in the name of the Proprietor to establish that the Proprietor is operating a business as a sole proprietorship.

Choose Your Package


₹ 2799/-

  • SSI/MSME Registration
  • GST Registration


₹ 9999/-

  • SSI/MSME Registration
  • GST Registration
  • 1 Year GST Return Filing


₹ 15999/-

  • SSI/MSME Registration
  • GST Registration
  • 1 Year GST Return Filing
  • Trademark Registration Application


Documents Required To Register Sole proprietorship



1. Aadhar Card and PAN Card of Proprietor


2. Address Proof of the premises - Electricity Bill/Property Tax bill - not older than 1.5 months


3. Passport size photos of the Proprietor



Specific Requirements:



1. A Sole Proprietorship must have a registered office in India. Documents like bank statement or electricity bill should be recent.


2. A utility bill, rent agreement or sale deed and an  NOC (Non-Objection Certificate) from the landlord with his / her consent to use the office as a registered office of a sole proprietorship must be submitted as well.



Steps To Register Your Sole Proprietorship



1. Experienced and dedicated personnel assigned for engagement.


2. Collection of required documents along with a simple checklist.


3. Verification of the Documents as required for registration by our registration experts.


4. Drafting of the essential documents by our Assigned Personnel.


5. Signing of documents by the Proprietor.


6. Application for registration to concerned authority.


7. Once the concerned authority approves, it will grant Registration Certificate.



Advantages Of Sole Proprietorship



There are various reasons why one should register as a proprietorship firm. Here are some of them:



Decision Making- In Proprietorships firms, control over all business decisions remains in the hands of the owner. The owner has full authority as no partners are involved to consult. This ensures quicker business decision making and hence, faster execution. 



Easy Setup-  The registration process for starting a sole proprietorship firm is very easy compared to other business structure. Obtaining a GST registration and MSME registration is also very quick and easy. As no other specific registrations are required to start, a proprietorship can create and receive payments from clients very easily.



Tax Benefits- The significant advantage of the Proprietorship is that it doesn't require any additional compliance in most cases. The PAN of the Proprietor and Proprietorship are the same.Hence, in most cases, only income tax returns in the form of ITR3 must be filed every year. The owner of a sole proprietorship is not required to file a separate business tax report. The business will be taxed at the rates applied to personal income, and not corporate tax rates. This means huge tax savings.



Dissolution- The dissolution or sale of the Proprietorship firm is very easy. As there is no legal distinction between the proprietor and the proprietorship firm, not much regulatory formalities are required for closing of a proprietorship. This undoubtedly saves time.



Inexpensive- A Sole Proprietorship registration is inexpensive as compared to all other forms of organizations. Hence, anyone who wants to start a business with low funds can go for proprietorships as no investments are involved. Also on account of the minimum compliance requirements, it proves to be an advantage as it is inexpensive even in long run also.



Self Employment-  The owner of Proprietorship firm, himself is self-employed and this creates various employment opportunities.  Also because the owner is in the hands of a single person, there are fewer chances of leakage of business secrets.



Compliances Required By Sole Proprietorship



GST Return- The proprietorship firms registered under GST are required to file the GST return on a monthly, quarterly and annual basis. GST return is a document that contains the details of the income of the taxpayer. As filing of GST returns is mandatory for all the registered Taxpayers. Main returns to be filed are GSTR-3B (which is a monthly summary) and GSTR 1 (details of outward supplies).



Accounting- The accounting for a sole proprietorship does not require a separate set of accounting records, since the owner is considered to be inseparable from the business. However, it is always advisable to maintain records for business activities of a Proprietorship firm, in order to judge whether these operations are generating a profit.



Income Tax Return- The proprietorships registered in India are required to file income tax returns. As the proprietors and the proprietorships are the same the income tax return filing for the proprietor and proprietorship is the same. Under the Income-tax Act, all the proprietors below the age of 60 will file ITR only if the total income exceeds Rs. 2.5 lakhs. If the proprietor is over 60 years and below 80 years, he should file ITR only if his income exceeds Rs. 3 lakh. Proprietors over the age of 80 years are required to file income tax if the income exceeds Rs. 5 lakh.



Tax Audit- An audit is required for the proprietorship firms if the total sales are over Rs. 1 crore during the financial year.In a professional case, an audit is necessary if the total gross receipts are more than Rs.50 lakhs during the financial year assessment.Also, an audit is required for any proprietorship firm under a presumptive taxation scheme irrespective of turnover if the income claimed is lower than the deemed profits and gains under the scheme. Audit for Proprietorship for income tax purposes must be conducted by a practicing Chartered Accountant.



Starting Your Sole Proprietorship With UpriseLegal



With our experienced and skilled personnel, We at UpriseLegal makes process of registering your Sole Proprietorship very smooth and helps you in each and every stepat a very affordable prices. You don’t have to worry on how to register a proprietorship as UpriseLegal is there to provide all the assistance that you need. We follow law to the core and uses our knowledge to avoid any hassles in your business so that you can rise and grow!  You may get in touch with our compliance manager on 9173512402 or email us at for free consultation.