Tag Archives: sole proprietor firm

Register Sole Proprietor Firm

As the name suggests, the Sole Proprietor firm is an establishment can be started by an individual. You would need minimum paper work to start the sole proprietor firm and the government of India is also very lenient with respect to the taxes incurred on the owners of such firms.
The detailed process to start a firm is as below:
1. PAN Registration: PAN is abbreviated as “Permanent Account Number”. The individual who is the owner of the firm should have a PAN card on his/her name. The ITRs would be filed using the same PAN and it will be treated as the individual taxes and not the corporate taxes. The cost of applying a PAN card is Rs. 94/- as per Indian law. Apply for PAN here: https://www.tin-nsdl.com/
2. TAN Registration: TAN is called as Tax Collection and Deduction Account Number. This number is required when the firm owner is collecting taxes from either the customer or the employees. This is not required for the people dealing in service management at the initial level. Apply for TAN here: https://www.tin-nsdl.com/
3. Service Tax Registration: As per the law, if in any fiscal year the overall turnover crosses 10 lakh, you are liable to pay service taxes to the government which is 10% of your total income. In case the turnover is lesser than the limit you can run your business without service tax registration. For the firms, where the clients need the invoices for the cheque/credit clearance, service tax registration is recommended since the start. The invoice letter should have the service tax registration number. In general the invoices must have following information:
a. Supplier Name
b. Supplier Address
c. PAN
d. Supplier’s Service Tax Registration Number
e. Proprietor’s Name
f. Supplier’s VAT number (in case of VAT charged from client)
More info on service tax registration, check here: http://www.servicetax.gov.in/st-proc-home.htm and http://www.servicetax.gov.in/forms/st1.pdf
4. VAT/CST Registration: VAT and CST are required if you are buying or selling the taxable goods. For the intrastate transaction VAT is required and for the interstate transactions CST will be required.
5. Professional Tax: This tax is required if you have even hired a single employee and paying him/her the salary and deducting taxes from his/her salary.
6. Employee Provident Fund (EPF) and Employee State Insurance (ESI) Registration: EPF registration is required if you have more than 20 employees. In that case you need to register your firm in EPF office of your state. The EPFO is governed by the Ministry of Labor and Employment. Each employee should then have the PF account registered in the EPFO.
On the other hand, ESI registration is required for the firm having 10-20 employees. In case of a factory, ESI registration is required for 10 employees.

More details, please check here: http://www.epfindia.gov.in/ , http://www.epfindia.gov.in/registration.htm and http://www.esic.nic.in/
7. Shop and Establishment Act: This registration is always a matter of confusion as some people believe it’s mandatory while some believe its optional. Please remember, once you set up your sole proprietor firm, its always recommended to register under the Shop and establishment act. This is always required to open a physical location like shops, office etc, for your business. In case you are operating from home, this license can be kept as optional but not always recommended. For no employees, the annual fee is 120/- and it ranges up to 12500/- depending on the number of employees working at your firm.
8. Importer – Exporter Code: This is a 10 digit code similar to PAN required for international trading. The same is issued by Director General of Foreign Trade, Ministry of Commerce, Government of India to Indian companies and firms. More details, please check here: http://dgft.gov.in/
9. Bank Account: A bank account with your name is required. This will be referred for the ITR filing. The bank account should mention the details of the sole proprietor firm. It’s recommended to opt for the current account in any of the recognized national/international banks. Visit any bank for more details on this.
10. Trademark and Copyright Registration: This is required to register your logo or trademark, if any, for the marketing and branding of your product and services. The normal charges of registration are up to 9000/- depending on different locations. This registration is optional and only required if you want to make a brand name for your firm.
11. Website Design: In the today’s digital world, you cannot even imagine your firm or business without a website. The websites are the best mode of your marketing. With the websites, you should make an email address with the domain name registered e.g. @.com
It is always advisable to design the website which is user friendly and explains the purpose of your business. The websites are always helpful in the SEO and other modes of digital marketing. You can also apply for the payment gateway for the online transactions via your website.

Happy Learning!!!