"Starting a sole proprietorship in India is simple and has been a long-standing option for businesses. In this setup, one person owns, manages, and controls the business – they're the proprietor. Because the proprietor and the business are the same, starting is easy, and there are minimal compliance requirements.

However, it's important to note that a sole proprietorship cannot have partners or shareholders, and there's no limited liability protection for the proprietor. This makes it best suited for small businesses."

Who is a sole proprietor?

A sole proprietor is the only owner of a proprietorship business. They set up a new bank account for the business and do GST registration using their PAN and Aadhar card of proprietor. The proprietor is fully responsible for everything in the business, including assets and liabilities."

Sole Proprietorship Registrations & Licenses

To start a proprietorship business in India, the owner needs PAN and Aadhar. They must get GST and UDYAM registration, open a bank account, and in some states, get Shops & Establishment Act registration. Depending on the industry and location, additional licenses and permits may be needed

Obtaining GST Registration and Udhyam Registration for Proprietorship

To get GST registration for a proprietorship through Vyapar Samadhan, you need these documents:

• PAN of Proprietor
• Digital Signature Certificate
• Consent for GST Registration
• Photographs of Proprietor and Authorized Signatory
• Bank Account Details
• Declaration / Authorization
• Rent/Lease Agreement (for commercial purposes)
• Additional documents like Aadhaar Card, Driving Licence, Passport, or Voter ID may be needed.

After GST registration, the Vyapar Samadhan team helps with UDYAM registration using Aadhaar, PAN, and GST certificate.

Obtaining Shops & Establishment Act License for Proprietorship

To get a Shops & Establishment Act License for a proprietorship, the process varies by state, available online or offline. In many states, you can get the registration in 2-3 weeks.

Timelines for Sole Proprietorship Registration

For Sole Proprietorship Registration through Vyapar Samadhan, it usually takes less than 15 days. However, actual timelines may vary depending on government and bank processing."

Compliances for Proprietorship

The following are some of the compliances that are applicable for a sole proprietorship:

Income Tax Filing: The business owner of a proprietorship will have to file personal income tax return using form ITR-3 or ITR-4.

Business Income: Only income tax forms ITR-3 and ITR-4 allow for declaring business income. Hence, all proprietorships will have to file form ITR-3 or ITR-4 to be compliant with the income tax regulations.

GST Return Filing: If a proprietorship has GST registration, GST return must be filed every month and quarter as per the scheme under which the business is registered.

TDS Returns: In case the proprietorship is having employees or purchasing goods/services beyond a certain threshold - tax must be deducted at source and TDS returns must be filed every quarter.

In addition to the above, various other compliance requirements maybe applicable to the proprietorship based on industry and location.

Proprietorship vs Limited Liability Partnership (LLP) vs Company: