Proprietorship or sole proprietorship as the name goes is the simplest way of running a business and does not refer to any particular business entity.Proprietorship registration is popular in India with many of the small type of organisations, as the tax compliances involved is minimal. In this kind of business structure, it is only the sole proprietor liable for the assets and liabilities. In a sole proprietorship business the owner can either run the business in his own name or under an imaginary name.
There is no such hard and fast rule laid by the government of India to register a sole proprietorship firm. It must be formulated through tax registrations or business registrations in the name of the owner or Proprietor to confirm that he/she is operating the business. This would make the Proprietor liable for all the liabilities of Proprietorship registration.
As the owner and sole proprietorship are same the taxation rules are simple and the income earned by this business is that of the owner and taxes are paid on the profits earned by the sole proprietorship.
Aavana Corporate Solutions one of the well known business registration services and complete financial assistance company helps you in understanding the process and how to get a sole proprietorship registration in Bangalore done smoothly. Offering a gamut of registrations be it private limited, one person company, limited liability partnership or partnership and also various other services assisting you throughout the year is done seamlessly by our experts.
Documents Required for Proprietorship Registration
- Aadhaar card is a mandatory document and also it has to be linked to PAN card for filing Income Tax Return.
- If you do not possess a PAN card, then apply for it and the sole proprietorship registration can be done after acquiring it.
- Recent current bank account details have to be given for address and identity proof. For opening a current account GST details have to be submitted.
- Registered office address is also a must. If it’s a rented property then rent agreement and NOC from a landlord and if Self-owned Property then electricity bill or any other address proof.
- Getting sole proprietorship registered as Small and Medium sized Enterprise (SME) under MSME Act is advantageous in availing loans for business at concessional rates.
- Shop and Establishment Act License is required which is given by the municipal party based on the number of employees.
- If the sole proprietorship business is over 20 lac then getting GST done is mandatory especially if you’re running an e-commerce business.
Proprietorship registration though can be done on our own through the portal, but you need to have the right kind of expertise on the documents, name selection process, how to get the GST done.
Instead, getting it done through our professional experts will save your time, energy and also many. How can we help you?
- Just need to get in touch with our consultants, and select what services you require be it only Proprietorship, or with MSME, or GST
- We bet that we can give you the best pricing comparatively
- Then we collect the required documents
- If you do not have a PAN card we help in getting one
- Get the name approval done
- Apply and get your GST done.
Criteria of Proprietorship
- For Income up to Rs 2,50,000 = Nil tax
- Income from Rs 2,50,000 – Rs 5,00,00 = 5%
- Income from Rs 5,00,000 – 10,00,000 = 20%
- Income more than Rs 10,00,000 = 30%
- Surcharge: 10% of income tax, where total income exceeds Rs.50 lac up to Rs.1 crore.
- Surcharge: 15% of income tax, where the total income exceeds Rs.1 crore.
- Cess: 3% on total of income tax + surcharge.
ADVANTAGES OF SOLE PROPRIETORSHIP
It is way simple to start a sole proprietorship firm than any other business registration due to lesser compliances and procedures. Also the cost involved is lesser and can be started in the name of the owner or a fictitious name. You can start a proprietorship firm just with Trade License, VAT, and Service Tax if applicable and open a Current Account in the name of the Sole Proprietorship.Minimum Tax Compliances
In a sole proprietorship, the owner will produce business information and figures within their individual tax return and a separate business tax report is not required. As the accounting and taxation is simple where the tax being applied to personal income and not corporate tax rates the costs involved in filing and other things is less.
As the sole proprietorship form of business is run by a single person the decision making is entirely the discretion of the proprietor. Due to lesser people involved decisions can be better, smarter and quicker.Ease in Closing
As the legal formalities in sole proprietorship is less and restricted to a single person, complications in winding up the business is also minimum as the only thing required is the cancellation of tax registrations in the name of the owner.Hiring Employees
Hiring of employees for a sole proprietorship business is quiet easy. In fact, even the spouse can be appointed as an employee without having to be formally declared as an employee.