BBNC

Sole Proprietorship


Sole Proprietorship is the easiest type of entity to form. There are no/very few government regulations on sole proprietorship entity. This is the best suited entity type for entrepreneurs who are testing their business idea
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Overview

A sole proprietorship is also known as proprietorship in India. Sole proprietorship is not a legal entity hence any kind of registration or incorporation with government bodies is not required to start the sole proprietorship business.

However, some other registrations and licenses are required which are completely depending on the nature and scale of the business. For Ex. If the nature of the business of sole proprietorship firm is Restaurant, then FSSAI food license and Shops and establishment license is mandatory to take.



Benefits of Sole Proprietorship

Easy to form:

Sole proprietorship does not require any registration/incorporation this benefit makes it the easiest entity to form. Any person can select any entity name and start its business.

Less Compliance Burden:

A sole proprietorship firm has very less/no compliances, related to ROC and Income tax. Hence the entity does not require to spend time and resources on various government requirements.

Tax Advantage:

Unlike Private limited company shareholders, the owner of Sole proprietorship firm is taxed only once in a year. The sole proprietor pays only personal income tax on the profit earned by the firm.

Control:

The owner of the sole proprietor firm will complete control over all the operations and gets to make all the decisions. The are no board of directors or shareholders hence no approval is required.

Checklist/Requirements

  • Utility bill of the business address
  • KYC documents from the Bank
  • Address proof of the proprietor
  • Identity Proof of the proprietor
  • PAN of the proprietor

    • Process of Sole Proprietorship Formation

    Step 1: Name the Business
    Step 2: Open a bank account in the name of the business
    Step 3: Apply for required registrations and licenses. For Ex. GST Registration, Shops and Establishment Registration, MSME Registration, FSSAI Food License, Etc.

    Key Deliverables

    1. Registration’s certificate of any License or registrations (If Applied)


    Sole Proprietorship

    Why Choose Us

      Entrepreneur Friendly

    We make the process so easy and fast that you will not even feel the headache of all the paperwork, and our professionals will provide you all the promised deliverable within a given span of time.

      Experienced Professionals

    All our professionals are qualified and specialized in that particular work. Making sure no mistakes are done at the time of filings with the authorities so that company won’t have to pay any penalties due to mistakes.

      One Stop for All Your Requirements

    We support you throughout the journey of your business, from the incorporation, Accounting and taxation support, Secretarial compliance support, and Legal support.

      Cost-Effective

    We believe that cost plays a vital role in any company’s growth stage, that’s why we do not surprise our clients with hidden charges, you pay what you see in the initial proposal.


    Frequently Asked Questions


    What is the taxation for a sole proprietor in India?
    A Sole Proprietorship is taxed as an individual on the Slab Rates applicable.

    The Slab Rates are :
  • For Income up to Rs 2,50,000 - No 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 lakh 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.
    • Yes, A sole proprietorship firm can have a brand name, and they need to secure the brand name by applying for trademark which has to be applied separately.
    A Sole Proprietorship is not a separate legal entity from the owner. The Proprietor is the owner of the business in this case and not an employee so he cannot pay a salary to himself. So, it is obvious the proprietor is free to draw money from the business at any point of time as per his/her wish, but this would not count as salary.