Sole Proprietorship Registration Timeline

Sole Proprietorship Registration Timeline

A Sole Proprietorship form of business organisation is where a business is managed by a single person. Generally, it does not require any registration as such. Any individual who wants to start a business with less investment can choose this type of business form.

The control of the business is solely in the hands of the single proprietor/owner. A single person who wants to start a business from home or on a premise with a minimum amount can opt for this form of business type.

The investment for the sole proprietorship business will be done by the single proprietor. He bears all the losses of the business and enjoys all the profits. He controls the business as well as manages it. He can appoint persons for conducting the business, but the ownership will rest solely with him.

Many local businesses such as grocery stores, parlours, boutiques, retail stores, etc., can be established as sole proprietorship firms. Even small traders and manufacturers can establish a sole proprietorship firm.

Registration of Sole Proprietorship

The procedure for incorporating a sole proprietorship firm is-

  1. Applying for a PAN card.
  2. After obtaining a PAN card, or if the proprietor already has a PAN card, the next step is to keep a name for the sole proprietorship business.
  3. The next step is to open a bank account in the name of the business. All the transactions of the business will be through this bank account.
  4. Though no specific registration is required for starting a sole proprietorship firm, certain basic registrations are required to be obtained by a sole proprietorship firm for doing business. The basic registrations required by a sole proprietorship are-
    • The proprietor needs to obtain the Registration Certificate under the Shops and Establishment Act of the state in which the business is located.
    • The sole proprietorship should also register for GST if the business turnover exceeds Rs.20 lakh.
    • The sole proprietorship can also register as a Small and Medium Enterprise (SME) under MSME Act, though it is not mandatory, it is beneficial to be registered under the same.

Documents Required for Sole Proprietorship

The documents required for registration of Sole Proprietorship are-

  1. Aadhaar Card.
  2. PAN Card.
  3. Registered Office proof.
  4. Bank Account.

Checklist required for Sole Proprietorship

  1. PAN Card of the proprietor.
  2. Name and address of the business.
  3. Bank Account in the name of the business.
  4. Registration under the Shop and Establishment Act of the respective state.
  5. Registration under GST, if the business turnover exceeds Rs.20 lakhs.

What are the Compliances required?

As a sole proprietor, you must file Income Tax Return annually. Also, you need to file your GST Return if you are registered under GST. A sole proprietor should also deduct TDS and file a TDS return if liable for Tax Audit.

Timelines for Sole Proprietorship Registration

The Sole Proprietorship requires opening a bank account in the name of the business, a Certificate of Registration under the Shop and Establishment Act of the respective state, and GST Registration. The registration process takes approximately 10 days, subject to departmental approval and reverts from the respective department.


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