1. Overview

Starting a small business of your own is the dream of many but in Haryana, one of the most common ways to commence that small enterprise is by commencing as a sole proprietor; A sole proprietorship is a firm that has only one owner and does not have to be registered with the state. It is easy to establish and run such a business, owner will have full control. Sole proprietorship — This form is best suited for small merchants, craftsmen and freelancers in the state of Haryana who prefer to operate without entering into the intricacies of company structures.

2. Benefits

• a) Ease of Setup: Setting up a sole proprietorship in Haryana is relatively easy and requires minimal legal formalities.
• b) Complete Control: As the sole owner, you have full control over business decisions without needing to consult anyone else
• c) Tax Advantages: Sole proprietors can benefit from tax deductions on business expenses, making it a tax-efficient option for many small businesses.
• d) Simplicity: Managing a sole proprietorship involves less paperwork and fewer compliance requirements compared to other business structures.
• e) Direct Profit Retention: All profits generated by the business go directly to the owner, which can be reinvested or used as needed.

3. Procedure

1. 1) Pick a Business Name: The first thing you need to do is give your business a name that is special. You should pick a name for your business that is easy to remember and fits what it does.
2. 2) Get the PAN Card: For tax reasons, you need to make sure you have a PAN card in your name.
3. 3) Open a bank account: Use your PAN card, Aadhaar card, and proof of your listed address to open a current account at any bank, public or private.
4. 4) Register Your Business: basically, its not mandatory, it’s advisable to register your business under the Shop and Establishment Act of Haryana. This can be done online via state’s labor department website.
5. 5) GST Registration: Registration is required if your annual turnover surpasses the threshold limit. The official GST portal is the location where you can submit an application for GST registration.
6. 6) Acquire the Necessary Licenses: The type of license or permit required may vary depending on the type of your business, such as a food license or trade license.
7. 7) Fill out Annual Income Tax Returns: As a sole proprietor, it is mandatory to submit income tax returns on an annual basis. It is recommended that you maintain accurate records of all business transactions.

4. Documents

• 1) The owner's PAN card and proof of business address, like a rent agreement, utility bill, or property papers.
• 2) Details of the bank account
• 3) A certificate of registration for GST is required for official purposes.
• 4) A business license (if required)
• 5) Shop and business registration (if required)

5. FAQs

1. What is a sole proprietorship?

A sole proprietorship is a business that is owned and run by one person, with no separation between the owner and the business.

2. Is registration mandatory for a sole proprietorship in Haryana?

It's not required, but it's a good idea to register under the Shop and Establishment Act so that you have better legal standing.

3. Do I need a GST number in Haryana for my one-person business?

Yes, if your yearly sales go over the cap, you need to register for GST.

4. Can I convert my sole proprietorship to a private limited company later?

Yes, you can convert your sole proprietorship into a private limited company if your business expands.

5. The Tax Liability for a Sole Proprietor?

An individual (the owner of the sole proprietorship) will pay income tax at his or her personal rates on all profits from the activity.

6. Do I need a business Address in Haryana?

Yes, a registered business address and bank account are required.

7. Is it Possible to Run Different Businesses as One Sole Proprietor?

If possible, you will want to maintain them as a single name in order to avoid confusion and compliance issues.

8. Annual Returns for Sole Proprietorship ?

On a different note, no need for annual returns as such but yes you definitely have to pay income tax and file your IT return at the end of each financial year.

9. How long does it take to register a sole proprietorship in Haryana?

Registration could take up to a few days or even multiple weeks.

10. Can a sole proprietor hire employees?

Yes, a sole proprietor can hire employees, but they must comply with labor laws

11. Does a sole proprietorship need to register its trademark in order to start a business?

It’s not required, but if you want to protect your business name or logo, you should consider it.

12. What is the cost of setting up a sole proprietorship in Haryana?

The cost is minimal, mainly involving registration fees, GST registration, and any applicable license fees.

13. Is it possible to obtain a loan for my sole proprietorship?

Indeed, numerous banks provide business loans to sole proprietors, considering their creditworthiness.

14. What are the consequences of not registering my business?

Operating without proper registration can have significant consequences, potentially restricting your legal rights and ability to enter into contracts.

15. Is a sole proprietorship suitable for all types of businesses?

It’s best suited for small businesses with low risk and minimal capital investment.