A Sole Proprietorship is the basic unit of a business structure, managed, controlled and owned by one person. Since, the registration of sole proprietorship simplified ones, sole proprietorship is opted by small businesses working for limited time period. Certain documents and formalities to register Sole proprietorship are required. The formalities are:
- Registering as SME (Small and Medium Enterprise)
The registration can be obtained under the MSME Act and the application can be filed electronically. Though it is not mandatory to register as an SME, it is beneficial specifically at the time of taking loan owing to concessional rate of interest.
- Shop and Establishment Act License
This license is required to be obtained according to the local laws and is issued by the municipal party on the basis of the number of employees. It is not mandatory if not prescribed by local laws.
Since the new provisions of GST came into force it has become essential to obtain a GST number. In case of online business, the same is mandatory and otherwise one can get themselves registered if their annual turnover is more than Rs. 20 lakhs.