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This post was originally published in 2022 and has been updated on January 02, 2025, to provide you with the most current and accurate information.
If you do not want to go through the process of registering a company with the registrar of companies (RoC), you can choose to open your business as a sole proprietorship. However, a sole proprietorship is not a separate legal entity from its owner, meaning the owner and the business are treated as one and the same in the eyes of law.
Establishing a sole proprietorship is pretty easy. Unlike a partnership firm, there is no need to create a partnership deed, and unlike a private limited company, there is no requirement for an AoA or MoA. At a glance, to register a sole proprietorship you need only two things: a bank account and the GST registration.
Through this article, we are going to guide you through the steps required to register your sole proprietorship firm name in India.
Before we begin discussing the process to proprietorship firm name registration, it will suit you to know the definition of a sole proprietorship. It is:
The most basic form of business entity in India.
Not a legal entity and hence, no compliance other than income tax returns is needed.
Easy to form, with no substantial legal paperwork required.
Not necessary to have any money when you are establishing it, unlike in the case of a private limited company, one person company or public limited company.
Not a slave of separate income tax returns other than GST registration.
To register the name of Sole Proprietorship, you need to follow the steps below:
The name of any business holds a tremendous amount of weight. Therefore, you should think long and hard while naming your sole proprietorship. It should be unique, memorable and should not offend anybody. That being said, it’s not difficult for a sole proprietorship to decide upon a name. You can name your Sole Proprietorship with your own name if you want.
Before the proprietorship firm goes through name registration, it should decide its place of business. Depending upon your trade, you can set your business anywhere. However, for nuanced businesses like eateries, legal firms and shops, you must obtain all the required permits and ensure the location is easily accessible and targets the right customers.
Following are the documents required for the GST registration of your Sole Proprietorship firm:
ID proof of the proprietor
Address proof of the place of business
Government registrations
A certificate from the Chartered accountant
Once collected, file the application for GST registration in India. Once you acquire the GST registration number, you can apply for a bank account in the name of your firm.
Even when you have registered your proprietorship firm, you aren’t secure. In order to prevent your competitors from using the same name, you need to register it as a trademark. The process of trademark registration for a sole proprietorship business name is as follows:
Conduct a trademark search.
File the application for trademark registration.
Monitor the application for trademark registration.
File the trademark reply if the trademark application is rejected.
Wait for 4 months till the trademark is published in the journal.
If there are no objections, the trademark/name of your sole proprietorship will be transferred to trademark registry.
Setting up your business as a sole proprietorship saves you from the hassle involved in the company registration process with RoC. After choosing the name of your sole proprietorship, you should register it as a trademark. With trademark registration for your proprietorship firm’s name, you can protect its identity for a long time.
Q1. Is sole proprietorship a separate legal entity from its owner?
A. No, a sole proprietorship is not a separate legal entity from its owner.
Q2. What is the owner of the sole proprietorship called?
A. The owner of the sole proprietorship is known as proprietor.
Q3. Is GST registration required for sole proprietorships?
A. Yes, GST registration is required for sole proprietorships if their annual turnover exceeds Rs. 40 lakhs (or Rs. 20 lakh rupees for certain states).
Q4. Can a sole proprietorship conduct export business?
A. Yes, a sole proprietorship can conduct export business as long as it has a valid Import Export Code from DGFT.
Hey there, I'm Dushyant Sharma. With the extensive knowledge I've gained in past 8 years, I have been creating content on various subjects such as banking, insurance, telecom, and all the important registration and licensing processes for various companies. I'm here to help everyone with my expertise in these areas through my articles.
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