Depending on the nature of business, the registration process for sole proprietorship generally consists of minimum documentation. There is no government registration required to start your sole proprietorship business in India. You aren’t required to submit documents online and complete a registration process. What you need is to open a current bank account in the name of the business you wish to start.
Opening a bank account for sole proprietorship
To open a current account with the bank, it’s required to have a specific location from where you are doing the business. The bank requires you to submit proof in the form of at least two documents that show your business location recognized by the government. This could be a shop license, GST, VAT, etc. The bank should be informed of the legitimacy of your business location to open a current account for sole proprietorship.
What is the legal definition of sole proprietorship?
In this article, we will cover a few easy steps Shop And Establishment Registration. But before we get into the fine details, let’s find out what a sole proprietorship legally means and what are the benefits.
Sole proprietorship is defined as a “one-man organization where a single individual owns, manages and controls the business.” This is the definition by the Government of India.
Besides having control over your entire business, the ease of forming a sole proprietorship company is also a huge advantage. Especially for people looking to be self-employed, a sole proprietorship offers an organized way to run the business. You don’t have to pay any fees for starting a one-man business by yourself and there is no government paperwork or compliance to meet. You don’t have to worry about a minimal capital investment since you are the sole proprietor of the business. You have full ownership and control over the business you start.
A sole proprietorship also prevents double taxation of the business since you keep whatever profits or income generated by the business. You only have to file for taxes and pay them under your personal name. There are no additional income tax returns to be paid by your business. This means that you gain financial independence for running the business for profits.
Starting a sole proprietorship company in India
To start a sole proprietorship company in India, you just required two things.
- Pick a business name
- Pick a location as the place of running the business
With this, you can start legally doing business. The benefit of starting a sole proprietorship is the legal independence you gain to run a successful business as your own entity.
Do you have to register for a sole proprietorship in India?
No. You do not need to Get Shop And Establishment License with the government. However, to receive payments in your business’s name, you must open a current account in the bank of your choice. To open the current account, the bank will ask for documents that prove the existence of your business. This is the address proof required to open a current account to start your sole proprietorship company in India.
The documents you can submit to a bank include:
- Pan card of proprietor
- ID for address proof (Aadhaar card, passport, driver’s license, etc.)
- Business place address proof (electricity bill, rental agreement, utility charges, etc.)
- 2 government registration documents to confirm the name and address of your sole proprietorship business (GST, VAT/CST, shop license, etc.)
- CA certificate – The CA certificate can be obtained from any CA for a nominal fee to provide the certificate. The Chartered Accountant (CA) certificate refers to Certificate for opening a Current Account at the bank. In most cases, the bank will provide you with a self-attested CA certificate.
If you have all these documents ready and in place, the sole proprietorship process is very straightforward. You can easily open a current account with the following documents and start your sole proprietorship company in India.
For any additional information or guidance on the matter, contact PAN India Registration, the exclusive portal for business registrations at your fingertips. Our experts will offer you the necessary advice and guidance in setting up a new business or fulfilling legal and commercial documentation for the successful operations of your existing businesses.
