Sole Proprietorship

A Sole Proprietorship is the simplest type of business structure that is managed, controlled and owned by one person. Sole proprietorship is generally opted by micro and small-sized businesses with less investment. A Sole Proprietorship has no separate legal identity and has the same legal entity as the proprietor. The ownership of a sole proprietorship cannot be transferred to another individual and the business comes to an end with the death or exit of the owner.

Sole proprietorship registration is mostly opted by unorganised small businesses, working for a limited period of time, or at a very small scale. However, the legal compliances and formalities to register a sole proprietorship are the easiest as compared to other forms of businesses and it can be incorporated with few simple formalities.

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What are the documents required for Sole Proprietorship registration?

The documents required to start a sole proprietorship business includes the following:

  1. PAN Card
  2. ID Proof (Passport / Voters Card / Driving Licence and Aadhaar Card)
  3. Rental Agreement, if the property is rented
  4. Electricity Bill as the proof of address, if the property is owned
  5. Passport-size Photo

What is the process of registering a Sole Proprietorship in India?

The process of sole proprietorship registration includes submitting the relevant documents, filing of the application for registration, filing of GST registration application for the business and processing of the application. The entire process takes 5-10 days to complete.


Who can start sole proprietorship?
Any Indian citizen with a current bank account number in the name of his business can start sole proprietorship.
Can a Foreigner or NRI register a Sole Proprietorship in India?
No, a sole proprietorship cannot be started by an NRI or foreign national.
What amount of capital is required to start Proprietorship Firm?
A Proprietorship Firm can be started with any amount of capital. There is no minimum requirement of capital for sole proprietorship registration.
Can a Sole Proprietorship be converted into a PLC or LLP?
Yes, a sole proprietorship can be converted into a Private Limited Company or Limited Liability Partnership.
Is Certificate of Incorporation or Registration required for Sole Proprietorship?
A sole proprietorship firm does not require a Certificate of Incorporation or Certificate of Registration.
How to register the name of a Proprietorship?
A sole proprietorship can adopt any name that does not infringe upon existing and registered trademarks. There is no requirement for name approval or registry for sole proprietorship.
Is GST Registration required for Sole Proprietorship?
A sole proprietorship will have to get its GST registration done if it falls under any of the following criteria: 1. If the business has an aggregate turnover of more than Rs. 20 lakhs. For dealers in North-Eastern states of India, GST is compulsory if the business has an aggregate turnover of more than Rs. 10 lakhs. 2. If the business is selling on any online platform. 3. If the business is engaged in inter-state supply of products or services.
Can a Sole Proprietorship raise funds from investors?
A sole proprietorship is owned, managed and controlled by one person. Hence, a proprietorship cannot issue shares or raise funds from investors.
Do I need a Bank Account to operate a Sole Proprietorship?
Yes, a current account is required to operate a sole proprietorship in India.
Can there be partners in a Sole Proprietorship?
A Sole Proprietorship is managed and owned by one individual only. There cannot be any partners, shareholders or investors.