Sole Proprietorship Registration
Starting at INR 4999 onwards
Sole Proprietorship
A Sole Proprietorship Registration is the simplest and easiest form of business registration. It is not a legal registered entity and operates under the identification of its owner. A Sole Proprietorship can use its owners name or a fictitious name as its business name, though this does not categories it as a separate legal entity. The Sole Proprietorship is a popular form of amongst small and mid-scale businesses due to their ease to setup, nominal cost, lesser compliance and ease to operate. A Sole Proprietorship requires just to register the owners name and secure local licenses to start operating. The owner of a Sole Proprietorship needs to sign contracts in their own name as the sole proprietorship doesn’t have a separate identity under the law. It also has the distinct disadvantage of being personally liable for all the debts incurred by the business. A Sole Proprietorship Registration does not give its owner the benefits of Limited Liability. However, a Sole Proprietorship registration can allow an entrepreneur to do, commingle personal and business property and funds, something that Companies, LLPs and corporations cannot do.
Why Register a Sole Proprietorship?
Separate Legal Entity
A Private Limited is a separate legal entity as distinct from its members, and is separate at law from its shareholders,directors, promoters etc. A Pvt Ltd Company have the capacity to own properties, incur debts and exercise a number of legal rights.
Perpetual Succession
A Pvt Ltd Company exercise “Perpetual Succession”; which means that a company’s life is not determined by the longevity of its members, shareholders, promoters, directors, employees or anyone else. If a shareholder dies, or hypothetically, all the shareholders of Private Limited Company dies or resigns , only their shares in the company will be transferred to new people.
Limited Liability
Limited Liability protects the personal assets of founders, partners, directors or shareholders of the company in case of debt or insolvency. Unlike unregistered forms of business, in a Pvt Ltd Company, the liability of the members in respect of the company’s debts is limited only till their investment of capital in the company and not their personal assets. This feature makes it another preferred reason for entrepreneurs to register a private limited company.
Transferability of Shares
Shares of a Pvt Ltd Company are easily transferable by a shareholder to any other person. The Transfer process involves filing and signing a share transfer form and handing over the buyer of the shares along with share certificate.
Borrowing Capacity
A Pvt Ltd Company enjoys can avail better scope for borrowing funds. Banking institutions and Venture Capital Firms prefer to render financial assistance to a Private Limited company rather than partnership firms, proprietary concerns or any other form of unregistered business. Even a newly formed Private Limited Company Can reap the benefits of easy borrowing.
Suing Capacity
A Private Limited Company can file legal proceedings or a suit in a court of law exactly like an individual person. A Pvt Ltd Company being an independent legal entity can sue and also be sued in its own name.
What are the Minimum Requirements for a Sole Proprietorship Registration?
TWO DIRECTORS
For a Pvt Ltd Registration a company must have at least two directors and a minimum of one director should be an Indian. The maximum number of directors a Private Limited Company can register with is XX
REGISTERED OFFICE
The registered office of a company does not have to be a commercial space. Even a rented home can be the registered office, so long as an NoC is obtained from the owner of the property.
MINIMUM CAPITAL
There is no minimum Capital Requirement for a Private Limited Registration. However, it is suggested to register with a minimum capital of INR 1 Lakh in order to avoid multiple capital increase.
What are the Required Documents for a Sole Proprietorship Registration?
Passport Sized Photo
Passport sized Photos For All Directors
Identity proof
Aadhar Card/Driving License/Voter ID Card/Passport/Bank Statement
Address Proof
Latest Bank Statement/Utility Bill
Director Information
KYC Details Of Directors
Company Address Proof
Latest Bank Statement/Utility Bill
No Objection Certificate
NOC From Owner (We Will Draft this Doc)
Rental Agreement
Rental Agreement from director (We Will Draft this Doc)
Property Documents
If Property Owned by any Directors
What are the steps in Sole Proprietorship Registration?
What are the Deliverables?
Certificate Of Incorporation
A Certificate of Incorporation is a legal document issued by the Ministry of Corporate Affairs and Government of India after the Company Registration. It serves as the proof of legal existence of Private Limited Company.
Directors Identification Number
DIN is a unique Director Identification Number allotted by the Central Government to any individual intending to become a Director a company.It is an 8-digit unique identification number which has validity for lifetime.
Digital Signature
A Digital Signature (DSC) is an equivalent of a handwritten signature or stamped seal, but is way more secured and safe to use. You would receive a class 2 Digital Signature for all the Directors of the Company with a validity of 2 Years.
MOA/AOA
Memorandum of Association consists of the objectives of the organization. Articles of Association are reports that contains the purpose, obligations and responsibilities of its owners, directors, promoters or shareholders.
Company PAN
Registered businesses like Pvt Ltd Company needs to obtain a PAN Card in the name of the registered business. The PAN number needs to be quoted in every financial transaction of the business.
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Company TAN
Tax Deduction Account Number is a 10 -digit alpha-numeric number issued by the Income-tax Department. TAN is to be obtained by all persons who are responsible for deducting tax at source (TDS) or who are required to collect tax at source (TCS).
How much time does a Sole Proprietorship Registration takes?
Acquire Digital Signatures
One Day
Drafting MOA & AOA
Two – Three Days
Filing for Incorporation INC32
One Day
Private Limited Company vs. One Person Company vs. Limited Liability Partnership
Features
- Registration Law
- Entity Status
- Members/Owners Liability Clause
- Directors
- Foreign Ownership
- Transfer-ability
- Perpetual Succession
- Annual Statutory Meetings
Private Limited Company
- Companies Act, 2013
- Separate legal entity
- Limited Liability
- Minimum 2 Directors
- Allowed
- Ownership can be transferred.
- Yes
- Periodic Board and General Meetings are mandatory.
One Person Company
- Companies Act, 2013
- Separate legal entity
- Limited Liability
- Minimum 1 Director
- Not Allowed
- Ownership can be transferred.
- Yes
- Not Required
Limited Liability Partnership
- Limited Liability Partnership Act, 2008.
- Separate legal entity
- Limited Liability
- Minimum 2 Partners
- Allowed with prior approval of RBI
- Ownership can be transferred.
- Yes
- Not Required
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