Sole Proprietorship firm
As the name suggests, it is a business entity formed in the name of a single person. That person owns the business, manages it and controls the various operations. It can simply be formed by any person who wants to start a business without going through various legal formalities. The Sole Proprietor must be a Citizen and Resident of India.
REASONS TO OPT FOR A SOLE PROPRIETORSHIP FIRM
We all come across various shops in our locality carrying out small business operations. All these are Sole Proprietorships. They do not involve any complexities and can be handled by a single person in a comfortable manner.
Sole Proprietorships do not require mandatory registrations under any law. They only require registrations or licenses specific to the nature of business. So, any person can start his/her business easily with a trade name of his/her choice. Any trade name can be used in case it does not clash with any brand name. The name does not require any approval from registry.
Sole Proprietor is the only person who operates and manages the whole business, so 100% of the profits belong to him/her. No one else is entitled to a share in the profits earned.
Since the Sole Proprietorship involves only a Sole proprietor, hence no separate tax is required to be paid by it. Separate return is not required for the Sole Proprietorship firm. Also, the tax is calculated at income tax slab rates applicable to an individual. Other tax liabilities like GST will depend upon the nature of business.
Sole Proprietorship is not required to get its accounts audited each financial year under any specific law. The audit will depend upon the nature of business and the threshold turnover limits specified for the conduct of the audit.
DOCUMENTS REQUIRED FOR COMPANY FORMATION
Two Directors / Shareholders, Registered office, Main objects of proposed company.
Maximum Two names can be applied in a single time.
For all subscribers and directors
(mandatory for Indian national)
Aadhaar / passport / voter id / driving licence etc. (passport is mandatory for NRI / Foreign National)
Latest bank statement / utility bill / telephone bill
Latest passport size photographs
Email id, mobile number, educational qualification, place of birth, occupation of applicants
Rent agreement and rent receipts, noc from landlord, latest utility bill.
If Applicant Has Registered Trademark Of Proposed Name
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Copy of Trademark Application or Trademark Certificate.
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If The Promoter Is A Foreign Company or Foreign National or Non Resident
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1) NOC and Objects of the proposed company in the form of Board resolution, to be executed by Parent company. Board Resolution for Investment in Indian Company. It should also mention the details of representative Director in Indian company.
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Note – Board Resolution/NOC to be signed by Director of Parent Company on the letter head of the company.
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Board Resolution shall be Duly attested by foreign notary and apostilled.
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2) copy of Memorandum or Charter of Parent Company. (in English)
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3) Registration certificate of Foreign company. (Duly attested by foreign notary and apostilled)
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4) In case of foreign shareholders and directors, the most important step is to get identity and address proof attested as per the relevant Guidelines issued by Controller of Certifying Authorities, Government of India. This is necessary for getting digital signature and for getting Director Identification Number (DIN) for the foreign citizens. The requirements are different for different categories of foreign citizens:
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If Foreign applicant Native country is a signatory of Hague Convention : for attestation, proof of identity, address proof and other documents should be notarized by the public notary of that foreign country and APOSTILLED by the competent authority of that foreign country.
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If Foreign applicant Native country is not a signatory of Hague Convention : for attestation, proof of identity, address proof and other documents should be notarized by the public notary of that foreign country and CONSULARIZED by the competent authority of that foreign country.
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Apart from these documents we need the following documents which will be prepared by us. All these documents are also required to be notarized and apostilled/ consularized.
- Digital Signature application form
- Affidavits and declaration from directors and shareholders
- MOA and AOA