Limited Funding: A sole proprietorship depends solely on the proprietor’s personal savings, borrowings, and credit history. Since there are no partners or shareholders, raising funds from banks is challenging, and equity funding is not possible as profit-sharing or shareholding isn’t allowed.
Personal Liability: In case of unpaid loans or taxes, the proprietor’s personal assets can be seized to settle business liabilities. The owner remains personally liable until all debts are cleared.
Lack of Business Continuity: The business automatically dissolves upon the death or incapacity of the proprietor, making continuity difficult.
Restricted Growth: Limitations in funding, liability, and continuity make proprietorships suitable only for very small, unorganized businesses.
Unincorporated Nature: As proprietorships are unincorporated, there’s no centralized database to track their active or inactive status, keeping them largely in the unorganized sector.
Sole Proprietorship Registration
Proprietorship Registration with GST & Udyam By Expert Mantra
Simple and seamless process
Quick and hassle-free registration
Guided by our in-house experts
100% online documentation and support
What is a Sole Proprietorship?
Sole proprietorship is one of the oldest and easiest Business Structure to start in India. A proprietorship is a type of business that is owned, managed, and controlled by one person – who is the proprietor. As the proprietorship and proprietor are one and the same, it is very easy to start and there are very minimal compliance requirements.
As the proprietor and the business are one and the same, a proprietorship cannot have other partners or shareholders. Further, there is no limited liability protection for the proprietor from the business activities conducted in the sole proprietorship. Hence, this type of business entity is best suited for every small businesses with no more than 5 employees.
Who is a sole proprietor?
A sole proprietor is the sole owner of the proprietorship business. Hence, a business will be carried forward by making new bank account for the business and GST registration will be done by using PAN and Aadhar of the proprietor. The proprietor is completely responsible for all the assets and liabilities of the business.
Why Choose Expert Mantra for Sole Proprietorship Registration?
Expert Mantra has a dedicated team of registration specialists who offer end-to-end guidance to help you set up your sole proprietorship seamlessly.
Schedule a consultation with our compliance experts
Share the necessary details and documents
Get your business registered and compliances handled effortlessly
Advantages of a Sole Proprietorship
Easy Registration: A sole proprietorship has no complex incorporation or dissolution process since it is legally the same as the proprietor. However, certain registrations and licenses may be required to ensure compliance with Indian laws.
Lower Compliance: Proprietorships usually only need to comply with basic requirements like Income Tax and GST registration, resulting in fewer compliances. In contrast, LLPs and Companies must register with the Ministry of Corporate Affairs, file multiple statutory returns, and undergo annual audits by a Chartered Accountant.
Simplicity: With no partners, shareholders, or directors involved, a proprietor can manage the business independently with minimal documentation and approvals. This makes it an ideal structure for very small businesses.
Independent Decision-Making: The proprietor has full authority to make business decisions without requiring any approvals, enabling faster and more flexible management.
Complete Control: As the sole owner, the proprietor retains total control over all assets, revenues, expenses, and overall business operations.
Disadvantages of a Sole Proprietorship
Registering a Proprietorship Online with Expert Mantra
You can easily register your proprietorship online through Expert Mantra. To get started, you only need the PAN and Aadhaar card of the business owner. Our experts can help you secure the following registrations within 15 days:
GST Registration
UDYAM Registration
Zero-Balance Business Current Account with LEDGERS Accounting Software
Once you’ve initiated your proprietorship registration with Expert Mantra, simply follow these steps and upload the required documents via LEDGERS:
Step 1: Log in to LEDGERS using the email address used for payment.
Step 2: Navigate to the Services Tab and select “Proprietorship Engagement.”
Step 3: Upload your PAN and Aadhaar card copies.
Step 4: An Expert Mantra registration specialist will file applications with the GST Department, MSME Department, and Bank for opening your Current Account.
Step 5: You’ll receive access to LEDGERS Accounting Software for GST invoicing, return filing, and other business services.
PAN Card for a Proprietorship Firm
A proprietorship is not treated as a separate legal entity. Therefore, there is no separate PAN card issued for a proprietorship firm. Instead, the proprietor’s personal PAN card is used for all business-related registrations and financial transactions.
Sole Proprietorship Registration with Expert Mantra – Complete Guide
Obtaining GST Registration for Proprietorship with Expert Mantra
GST registration for a proprietorship is provided as part of Expert Mantra’s service package. The following documents are required:
PAN card of the Proprietor
Digital Signature Certificate of the Authorized Signatory
Proprietor’s consent for obtaining GST registration
Photographs of the Proprietor and Authorized Signatory
Bank details – a scanned copy of a cancelled cheque showing account number, MICR, IFSC, and branch information
Declaration or authorization for the Authorized Signatory
For commercial premises, a rent/lease agreement in the Proprietor’s name
Additional documents (Aadhaar Card, Driving Licence, Passport, or Voter ID) if the address on the ownership document (Property Tax Receipt, Municipal Khata copy, or Electricity Bill) is incomplete
Obtaining UDYAM Registration for Proprietorship
Once GST registration is completed, Expert Mantra assists in obtaining UDYAM Registration to help small and medium businesses avail various government benefits. This requires submitting the Aadhaar card, PAN card, and GST certificate of the proprietor.
Opening a Bank Account for Proprietorship
A current account for a proprietorship is opened in the proprietor’s name using their PAN card. The proprietor must provide proof of business activity, and any two of the following documents can be submitted:
GST registration certificate
Shop & Establishment Act license
Professional practice certificate from recognized authorities (e.g., ICAI, ICSI, Medical Council)
Importer Exporter Code (IEC) issued by DGFT
Obtaining Shops & Establishment Act License
The process for acquiring a Shop and Establishment Act registration certificate varies by state and can be done online or offline. In most states, this registration can be completed within 2–3 weeks.
Timelines for Sole Proprietorship Registration
With Expert Mantra, a sole proprietorship can typically be registered within 15 days. However, actual timelines may vary depending on government and bank processing times.
Permissible Business Activities for Proprietorship
A proprietorship can operate in almost all sectors where an Indian individual can legally conduct business. However, activities such as banking, insurance, financial services, lending, defense, and telecommunications require special government approvals and are typically operated through registered companies. Therefore, a proprietorship is best suited for small-scale businesses.
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Comparison of Proprietorship, Partnership, LLP, and Company Structures
| Features | Proprietorship | Partnership | Limited Liability Partnership (LLP) | Company |
|---|---|---|---|---|
| Definition | Unregistered business owned and managed by a single person | Business run by two or more individuals through a formal agreement | Hybrid structure combining partnership flexibility with limited liability like a company | Registered entity with limited liability for owners and shareholders |
| Ownership | Sole ownership | Minimum 2 PartnersMaximum 50 Partners | Designated Partners | Minimum 2 DirectorsMinimum 2 ShareholdersMaximum 15 DirectorsMaximum 200 ShareholdersFor OPC: 1 Nominee Director and 1 Director |
| Registration Time | 7–9 working days | 7–9 working days | 7–9 working days | 7–9 working days |
| Promoter Liability | Unlimited liability | Unlimited liability | Limited liability | Limited liability |
| Documentation | MSME / GST Registration | Partnership Deed | LLP Deed, Incorporation Certificate | MOA, AOA, Incorporation Certificate |
| Governance | – | Partnership Act | LLP Act, 2008 | Companies Act, 2013 |
| Transferability | Non-transferable | Transferable if registered under ROF | Transferable | Transferable |
| Compliance Requirements | Income Tax filing if turnover exceeds ₹2.5 lakh | ITR-5 | Form 11, Form 8, ITR-5 | ITR-6, MCA filings, Auditor appointment |
Frequently Asked Questions…
What is a Sole Proprietorship?
A Sole Proprietorship is the simplest business structure in India, owned and managed by a single individual. It does not have a separate legal identity from its owner.
What are the benefits of registering a Sole Proprietorship with Expert Mantra?
Expert Mantra ensures a quick and hassle-free registration process with minimal documentation, lower compliance requirements, complete business control, and cost-effective setup.
What are the requirements for registering a Sole Proprietorship?
To register, you only need the proprietor’s PAN card, Aadhaar card, and basic business details. Expert Mantra helps you obtain GST, UDYAM, and other necessary registrations.
Can a Sole Proprietorship have employees?
Yes, a Sole Proprietorship can hire employees. The proprietor remains responsible for employee management and statutory compliances.
Can a Sole Proprietorship be converted to another type of business entity?
Yes, with Expert Mantra’s guidance, you can convert your Sole Proprietorship into an LLP, Private Limited Company, or other structures when your business grows.
Is it necessary to have a physical office address for registering a Sole Proprietorship?
Yes, you need an address (residential or commercial) for business registration and GST purposes.
What documents are required for registering a Sole Proprietorship?
Key documents include PAN card, Aadhaar card, address proof, bank details, and where applicable, rental or utility bills. Expert Mantra assists in preparing and submitting all required documents.
How long does it take to register a Sole Proprietorship with Expert Mantra?
The registration process typically takes 7–15 days, depending on government approvals and documentation.
What are the tax implications of a Sole Proprietorship?
Taxes are filed under the proprietor’s name as individual income tax. GST returns must also be filed if the business is registered under GST.
Do I need to hire a professional to register a Sole Proprietorship?
While you can register on your own, hiring Expert Mantra ensures proper guidance, faster processing, and compliance with all legal requirements.
