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Sole Proprietorship Registration in India

Most businesses in India start individually without other’s participation. An individual carrying out business activities is the sole proprietor and its business entity is said to be a Proprietorship Firm.

The identity of an individual and the business are not different from each other. But due to the lower tax rate, flexibility and multiple advantages people prefer this structure for the early stage of business.

With the inclusion of partners, the control over operation reduces. Hence, these proprietors choose to run the business single-handedly and land upon sole proprietorship firm registration. Although there is no specific Act to regulate this organization, there are many ways to register a Sole Proprietorship firm. Small businesses aiming to take lower risks prefer this structure.

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Documents Required for Sole Proprietorship Registration


Latest Passport size Color photograph of all the promoters (Shareholders and Directors)

Pan Card

PAN Card of all shareholders and Directors. Foreign nationals must provide a valid passport.

Identity Proof

Any of the following ID: Passport, Voter ID/Driving License of Shareholders and Directors.

Address Proof

Latest Bank Statement/Telephone Bill/Electricity or Gas Bill/Water Bill of Shareholders and Directors

Registered office Proof

Latest & Clear Telephone Bill/Electricity Bill/ /Water/Gas Bill of the registered office address

NOC from owner

No Objection Certificate from owner(s) of the premises of registered office.

Six Reason for Sole Proprietorship Registration in India


You Are Your Own Boss

In a sole proprietorship, the proprietor has all the rights to decide what to do and how to operate. A proprietor neither needs to report someone nor take orders from anyone else. There is no interference from a third party. Unlike a corporate firm, there are minimal compliances or disclosure requirements during the whole financial year. Hence, Government interference is also very less.


Easy To Establish

It is relatively easy to establish and register a sole proprietorship business. There is no specific process to be followed to set up this business. Also, the cost of sole proprietorship registration is very less compared to any other business structure. The business runs on the identity of the proprietor himself. He can run any legal business in his own name or with a different legal name as a brand


Tax Benefits

The proprietorship business is not treated separately for income tax purposes. The tax slab as specified for an individual’s income is only applicable to the income of the business. The rates of tax are lower compared to other business structures like companies and partnerships. The benefit of deductions is an added advantage with combined ITR for individuals and the business.


Information Is Not Made Public

Unlike Companies, Limited Liability Partnerships, etc. where financial statements and audit reports are made public for the users through the MCA (Ministry of Corporate Affairs) portal, the financial reports of Sole Proprietorships remain in private hands. Even, the list of all proprietorships is not readily available with the Government officials.


You Own Whole Share Of Profit

The proprietor is the only owner of the business and therefore he owns the whole share of the business profit. Also, the business assets are treated as assets of the proprietor and vice-versa. He can decide when to withdraw profit or to reserve.


Lesser Investment

Sole Proprietorships can be started with a very minimal amount of investment at the initial phase. So, it is a great opportunity for those who want to set up a business with low funds as no minimum capital is prescribed for starting a Proprietorship.

Process & Timeline for Sole Proprietorship Registration in India

Step 1

Day 1

Business registration consulting

Collection of basic information

Provide Required Documents

Step 2

Day 2 - 3

Preparation of online application

Online Sole Proprietorship registration

Application for allotment of TAN

Step 3

Day 4 - 7

Registration Complete

Frequently Asked Questions​

Sole proprietorships have several advantages over others. They are easily formed and the proprietors appreciate sole regulator of the business incomes. But, a big disadvantage for sole proprietorship is the owner is personally legally responsible for all business damages and liabilities.

GST registration is not mandatory for proprietorship firm registration but depends on the business as well as turnover of the firm also. It is whole sole discretion of the proprietor whether he wants to register or not.

Sole proprietors usually need a general business license to legally operate their businesses. If proprietor deals with some different business activity like food business then Fssai license is required, if he does import export then IEC Code is required. All licenses depend on the business activity in which proprietor works.

A sole proprietor can raise capital by taking out loans to support the business. This business entity is not registered as an independent business but it’s operated under the name and personal responsibility of the owner.

Sole proprietorship businesses typically require less paperwork and are easier to maintain than partnerships or corporations. The accounting and record keeping methods are usually simple and straightforward in proprietorship and business owner is responsible only for the debts and liabilities.

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