Are you planning to start a sole proprietorship business? A sole proprietorship is a business that’s owned and operated by one person, with no partners. If this sounds like something you’re interested in, you may be wondering how to open a current account for sole proprietorship in India. Users of a sole proprietorship can have all the benefits of a corporation without the double taxation and formalities.
A sole proprietor has complete control over business assets, but also assumes personal liability for any debts. This means that if there is a problem with the business, your personal assets are at risk unless you take precautions beforehand. There are many steps involved in opening a current account for sole proprietorship in India – here’s our guide to help make things easier for you.
What is a Sole Proprietorship?
A sole proprietorship is a business owned by one person. There is no distinction between the business and the owner; a sole proprietorship is not a separate legal entity from its owner. Sole proprietors are not required to register their business with any government authority. Sole proprietors are independent contractors who are self-employed and have no employees.
They may sell products or services and keep all the profit from their sales. A sole proprietorship is the simplest and least complicated form of business. It’s easy to start and doesn’t require much paperwork. For these reasons, it’s often chosen by people who are just starting out in a field.
Registering a Sole Proprietorship in India
A sole proprietorship is the simplest form of business. It doesn’t require any formalities to establish itself and it’s easy to close it down as well. However, there are certain formalities that are required to start a sole proprietorship in India, such as –
- Filing of the application for permission to start a business (If permission to start business is required in your area).
- Drafting of a constitution for your company. – Filing of the constitution with the registration authorities.
- Filing of the sales tax return.
- Filing of the advance tax return.
It’s important to note that a sole proprietorship is a non-registered business. This means that you won’t be able to get a GST number for your business. Thus, you’ll have to pay taxes as a non-registered business.
How to Open a Current Account for Sole Proprietorship in India
It’s very easy to open a current account for sole proprietorship in India. You can choose from various banking options like a regular savings account, fixed deposits, gold fund, mutual funds, etc. You can also choose a current account that lets you withdraw funds freely. When choosing a current account, make sure that it is suitable for your needs. There are certain requirements that must be met in order to open a current account for sole proprietorship in India. These include –
- Age – You must be 18 years old or older.
- Address – The address on your ID must match the address on your account application.
- Other Requirements – You must have a bank account number or a PAN number.
Types of Bank Accounts for Sole Proprietorship
There are many types of bank accounts for sole proprietorship in India. The types of bank accounts include savings account, current account, & fixed deposits, etc. The type of account that you open for your business depends on factors such as its interest rate, convenience, etc. Some of the important factors that you must consider to open a bank account for sole proprietorship are –
- Account Type – There are many types of bank accounts that you can open. Some of the most common types of bank accounts include fixed deposits, savings accounts, current accounts, etc.
- Interest Rate – The interest rate of a certain account type is another important factor.
- Account Opening Procedure – You must also be aware of the procedure for opening a bank account.
Key takeaway
A sole proprietorship is a business owned by one person. It is the simplest form of business ownership and it does not require a corporation. A sole proprietorship is not a separate legal entity from its owner. Sole proprietors are independent contractors who are self-employed and have no employees. They may sell products or services and keep all the profit from their sales.
When starting a sole proprietorship, it is important to know that it is the simplest form of business and does not require any formalities to establish itself. However, there are certain formalities that are required to start a sole proprietorship in India. Once you have met these formalities, you can open a current account for sole proprietorship in India. You can create and set up a new current account via OPEN within 7 working days. But if there’s any additional documentation needed, the process can take up to 10 days or longer.