How Can You Register Your Company as A Sole Proprietor?

Author: Lovely Sharma

Setting up a sole proprietorship company is a cakewalk in India. The most interesting thing is its free governance, which means that no specific laws are there to govern it. In addition, you don't have to struggle for compliance because it is minimal, and you can follow it easily. Being run by a single owner, the decision-making lies in his hand. It means that he is the whole sole owner and manager of his company.

Now that you know the leverages and introduction, let's find out how to register a sole proprietorship company.

Checklist of Documents Required

  • Aadhar Card

This is the primary requirement if you want to register your own sole proprietorship in India. It must be linked with your PAN card so that you can easily file for the income tax return. If it's not yet connected, you may visit the SDM officer or e-Mitra or Aadhar Seva Kendra to link it. Once done, withdraw its hard copy.

  • PAN Card

The next document is a PAN card. As aforesaid, you must have it to file your income tax return. Without it, you cannot do so. For application, you may visit this link: https://www.onlineservices.nsdl.com/paam/endUserRegisterContact.html and pay just INR 110 to get it. Thoroughly read its terms and conditions and scan your photographs, identity proof, and address proof as per the given format and enclose.

As you send your application, the NSDL verifies your information. If it finds everything ok, it issues your PAN number. You may get it in 7 or 8 working days online. However, its hard copy may take 15-20 working days for delivery.

  • Bank Account

Now that you have Aadhar and PAN cards, visit the nearest bank and open a company or current account. This procedure will be completed by providing identity and address proof. In addition, you should have a GST registration number. You may consult with a consultant for a sole proprietorship company registration in India for more details. Else, you may face rejection or delays.

  • Registered Office Proof

There are two cases. The first one is associated with a rented property, which means that you have rented office premises. In this case, you should have a rent agreement and an NOC from the landlord.

Under the second case, your office would be self-owned. If this is your case, be ready with your electricity or utility bill. A sale deed can also fulfill the requirement.

There may be a few more documents that can be required. These can be a DIN number and DSC. An experienced consultant can help you with it.

How to Register the Sole Proprietorship Company in India?

These pieces of advice or suggestions can help you to set up your own sole proprietorship company.

  • Registering as an SME

You have the option to get registered as a Small and Medium Enterprise (SME). The MSME Act allows it. For its registration, apply online. However, you may have other options. But, this is the most leveraging decision because it benefits when you take a loan for your business later. In addition, there are several government-run schemes for SMEs that provide loans with concessional interest rates.

  • Shop and Establishment Act License

Many retailers or e-store owners are there who should have a Shop and Establishment Act licence. The local laws are there to state its leverages and benefits. Typically, it is a must-have licence for sole proprietors who run a shop or establish a commercial activity. You need to follow the local laws to get it.

  • GST Registration

Getting a GST number is a must if your annual turnover exceeds INR 40 lakhs. For eCommerce also, it is required. Consult with an experienced business and compliance consultant about how to get it. Basically, you should have these documents to show and verify your application:

A. PAN card, photo, and Aadhar Card of the business owner

B. Proof of business place (electricity bill/ rent agreement)

C. Bank statement copy (first page for verifying bank account number, address, and IFSC code)

You may apply for GST registration through the GST portal. Typically, the authority issues a GST number within 3-4 days of submitting the application.

This is how you can register your sole proprietorship company. There may appear some challenges, which can be sailed across easily if you know any banker or compliance consultant.