Forming a Sole Proprietorship
You do not have to take any formal action to form a sole proprietorship. As long as you are the only owner, this status automatically comes from your business activities. In fact, you may already own one without knowing it. But like all businesses, you need to obtain the necessary licenses and permits. Regulations vary by industry, state and locality. Use the Licensing & Permits tool to find a listing of federal, state and local permits, licenses and registrations you'll need to run a business.
Features
No Separate Legal Entity, Simple, Carried on by person/s, No distinct between owner and business, Owners keep all profits, Complete control over decision making.
Needs
Business Name, Business Location, DBA Certificate.
1. Card of Aadhar.
2. PAN Card PAN Card.
3. Bank account Bank account.
4. Evidence from the registered office
Other Registration Available for Sole Proprietorship
The Sole Proprietor can use other registrations like MSME registration or ESI (Employee State Insurance) registration GST Registration or professional to establish the existence of the business.
Procedure for Registration of Sole Proprietorship
Step 1: Applying for PAN. ( If you have not PAN). If you already have one this step is not required.
Step 2: To name the Business.
Step 3: To open a bank account in the name of the business.
What are the Compliances required by Sole Proprietorship ?
1. Filing of Income Tax Return annually.
2. Filling of GST Return if you are registered under GST.
3. A sole proprietor should also deduct TDS and file TDS return if liable for Tax Audit.