What is a proprietorship?
A sole proprietorship, is an entity that is owned, managed and controlled by one person. Sole proprietorship is the most popular and common type of business in India which can be registered within just 7 days and is very useful micro and small businesses operating in the unorganised sectors.
Basic feature of proprietorships is it is simple to start and have minimal compliance requirements for operating. This entity is ideal for entrepreneurs who are getting into business for the first time and for small businesses with few clients.Also on another side, its liability is unlimited and it also doesn’t have perpetual existence.
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businesswale.in can help to get register yourself for proprietorship in just 7 days. We can also help proprietorship firms to get various registration which are useful for running businesses including GST Registration and regulatory compalinces.
Below are the essential documents required for sole proprietorship registration
- PAN Card Copy of Individual
- AADHAR Card Copy of Individual
- Utility Bill for address of the Firm
- Photos with the banner of the Firm
- Photo of Individual
Any Indian citizen with a current account in the name of his/her business can start a sole proprietorship. Registration may or may not be required, depending on the type of business that is planned to be established. However, to open a current account, banks typically require a Shops & Establishments Registration.
A Sole Proprietorship business does not take more than 15 days to set-up and start functioning. This simplicity makes it popular among small traders and merchants. It’s also much cheaper, of course. This is the other reason why it’s the most widely used business structure.
Most local businesses are run as sole proprietorships, from grocery stores to fast-food vendors, and even small traders and manufacturers. That is not to say that larger businesses cannot operate as sole proprietorships, they can! Jewellery shops are sole proprietors, but it is not recommended.
This depends on the business you’re in. It is compulsory for any business whose turnover in a financial year exceeds Rs 20 lakhs (Rs 10 lakhs in the case of North Eastern states) to get a GST registration. For businesses that are involved in selling goods or services to customers out of a commercial establishment, it is mandatory to register under Shops and Establishments Act.
The procedure involved is a little tedious, but it is possible. It is very common for sole proprietors to convert into partnerships or private limited companies at a later stage of their businesses.