Today we at myonlineca discuss about Documents required for Sole Proprietorship. Sole Proprietorship is the easiest form of business entity to register and operate in India since it features Ease of formation, less legal compliances, secrecy of operations and complete control are some of the reasons which compel new entrepreneurs with relatively scarce resources to start as a sole proprietor.
The sole proprietor doesn’t require to obtain Business registrations, but it is advised to obtain the Business registration to make his business function smoothly In India.And also A partner cannot file a suit in any court against the firm or other partners if the firm is unregistered as the unregistered firm cannot file for suit in the court in case of any dispute that may arise in the business.
Documents require registering a sole proprietorship
The Following is a list of documents that are required to be presented for the registration of sole proprietorship :
Aadhar Card – Aadhar number is now a basic necessity for applying for any business registration in India. Also, income tax return can be easily filed if the person has linked his PAN card with Aadhar number. To get an Aadhar Card you need to Contact nearest E-Mitra or Aadhar Seva Kendra.After applying for Aadhar card, a hard copy of the card is received at the registered address within 15-20 days.
PAN Card – PAN card is required as an Identity Proof, for filing tax returns and for conducting even the simplest of financial transactions like opening a savings bank account or applying for a debit/credit card.you can apply for pan card online on NSDL Website by filling and submitting an online form, Once Pan card application is submitted, it is checked at NSDL for verification of the information supplied by you , and if NSDL finds the information to be correct and satisfactory, it allots the PAN number within 7-8 days and a hard copy of PAN card is sent to the registered address within 15-20 days.
Bank Account – After you have got Aadhar Number and PAN, you can visit any bank for opening a current account with them, which mandatory for the business organization.
Registering as Small scale business – You should get an SSI Registration done under the MSME Act. The application can be filed electronically on the website of MSME. As It is highly beneficial at the time of taking the loan for the business. Also, The Government runs various schemes for Small-scale Businesses where the loans are provided at the concessional rate of interest and also small-scale Business also get support from the Government in terms of promotion and Business operations.
Shop Act License – This is a very basic license and also mandatory to be acquired by the Businesses. This license is granted by the state government or municipal corporation of the respective state. Also, this license is necessary for all Business registration in India and it needs to display all the time in the business premises.
Other Documents – The other documents that are also required for the registration of sole proprietorship are Voter Id, Passport, Driving License, Electricity Bills copy or gas bill or phone bill, Personal Bank Account Cancel Cheque, Bank Statement and Passbook FrontPage etc.
As in the previous article, I have told you that sole proprietorship business is well suited for startups, small businesses or home base businesses.the main advantages of sole proprietorships have are as follows:
Ease of formation: Starting a sole proprietorship is much less complicated than starting a Private limited company, LLP, Partnership and One person company etc, and also less costly. And sometimes business registration is not necessary to be taken by the owner, he can start by acquiring any license and legal formality.
Tax benefits: The business will be taxed as per the rates applied to personal income, not corporate tax rates which gives it a tax benefit and reduces the cost.
Employment: Sole proprietorships can hire employees, Relatives of the business owner can be employed without formally declared as an employee and Married couples can also start a sole proprietorship.
Decision making: The owner exercises a full control over the decision making in the Business.
Therefore, you should gather all the above-listed documents if you wish to open a sole proprietorship firm In India.