Documents Required for register sole proprietorship
ID Proof:
- Aadhaar Card
- PAN Card
Office Address Proof:
- Rental agreement for the registered office
- Sale deed or utility bill for self-owned property
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In India, register sole proprietorship is a commonly adopted business structure. In a sole proprietorship, a single individual takes full ownership, management, and control of the business.
Sole Beneficiary of Profits: register Sole proprietorship and one-person companies allow the sole owner to be the exclusive beneficiary of profits.
Minimal Compliance: Sole proprietorship firms have minimal compliance requirements, and income tax filing is only required for taxable income above specific thresholds.
Tax Deductions: register sole proprietors can avail of tax deductions available to individuals, reducing their income tax liability.
Privacy: Proprietorship firms offer more privacy compared to registered entities like companies or LLPs.
Quick Registration: The process of registering a Sole Proprietorship Firm is quick and straightforward.
Choose a Business Name
Obtain Required Licenses and Permits: Ensure you have the necessary licenses and permits to operate your business in your state or city.
Apply for Shop and Establishment Act License: This license is required in your city.
Open a Current Bank Account: Open a bank account in your business’s name.
Register for Taxes: Register for taxes like GST and obtain any necessary tax identification numbers.
ID Proof:
Office Address Proof:
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If you operate a sole proprietorship business in India, you don’t need to file a separate income tax return for business profits. Instead, you declare business profits in your personal income and pay taxes based on individual tax slabs.
Income Tax:
Use ITR-3 Form if you belong to the category of Hindu Undivided Families (HUFs) or resident individuals and earn income through a profession or proprietorship business.
Use ITR-4 or SUGAM form if your total income is up to ₹50 lakh, and your Income from Business and Profession is computed on a presumptive basis.
GST:
GST registration is mandatory for sole proprietorship firms in the following scenarios:
When annual turnover exceeds ₹40 lakhs (₹20 lakhs in Special Category States).
When selling products or services across state borders, either directly or through an e-commerce portal.
When seeking to claim input tax credit for inputs on a purchase voluntarily.
To open a current bank account after obtaining sole proprietorship registration, provide the following documents:
Proprietorship firms, while simple, have specific compliance requirements:
Note: Sole proprietorship is a straightforward business structure in India, with its own set of benefits and responsibilities. Understanding these aspects can help individuals make informed decisions when setting up and running sole proprietorship businesses.
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