How to register a sole proprietorship in India – A sole proprietorship is a form of simple business which can be done by a single person also, it is not included as a legal entity. It classifies the person who is the owner of the business because the owner will only be responsible for all the losses of the company. A sole proprietor can work under the owner of the company and it can also work under a fictitious name, such as Pihu’s Nail Salon. The fictitious name is just a trading name of the company– it can not create any legal entity separate from the sole proprietor owner.

There are 3 basic ways to register a sole proprietorship in India:

  1. Register under the Shop and Establishment Act.
  2. Get a Udyog Aadhaar under the Ministry of MSME.
  3. Get a GST registration.
How to register a sole proprietorship in india
How to register a sole proprietorship in india

Register under the Shop and Establishment Act:

Under this act, the sole proprietor can register his business under the Shop and Establishment Act. If he has a shop or a piece of land where he can do business. 

  • A place where goods can sell either by wholesale or retail
  • The place where the services are provided to the consumers.
  • It can be an office, a storeroom, godown, warehouse or any type of workplace which can be used in connection with such kinds of trades or business.

It will not include any factory, or any commercial establishment, residential hotel, restaurants, cafes, or any other places where public entertainment is available.

If you have any shop according to the definition given above, then only you can register for your sole proprietorship business under the Shop and the Establishment Act by making an application to the local Municipal Corporation of your city.

Get a Udyog Aadhar under the Ministry of MSME:

It is considered as a unique form of identification number which is provided by the Ministry of MSME to the business owners. Along with all the other entities such as a company and partnership, even the sole proprietor can also apply for the Udyog aadhaar no. 

Get Udyog Aadhar for your firm

Accept from getting eligible to avail the benefits which are offered by the Ministry of MSME, a sole proprietor has the advantage of getting a unique identity of his business which can also be considered as a Sole Proprietorship Registration.

Udyog Aadhaar is a new way of doing registration under the Ministry of MSME. It can be replaced by the old method of registration, where form EM-I and EM-II were used for registration. Now for applying a Udyog Aadhaar any businessmen can register themselves to avail themselves of the importance of various schemes which was introduced by the Ministry of MSME.

Get a GST Registration:

It is another way of getting your sole proprietorship registered if you are dealing with any kind of exchange of goods and services. It can be replaced by the old VAT and service tax registration.

It can be a great method of getting an identity for your sole proprietorship concerns. However, there is a  certain necessity that must be evaluated before applying this method. 

Get GST registration for your firm

Under this registration, there is only one drawback is that after registration it is mandatory to meet all the compliance. Every type of registered business is temporary to meet all compliances which are meant by consumers. Every registered business has to collect all the taxes from the customers and file them in the GST returns.

If any sole proprietor has a turnover of less than Rs. 20 Lakhs, then it is not compulsory for him to get registered and collect GST. But if he still chooses to register in order to register his sole proprietorship then he has to go through unnecessary added compliances which he can avoid.