While a sole proprietorship doesn’t require extensive registration, certain licenses and documents are required to operate legally. Here’s a step-by-step guide to help you get started:
1. Choose a Business Name
First, you need to select a name for your business. Make sure the name is unique and does not conflict with other registered businesses in your area. It’s always a good idea to check with the Ministry of Corporate Affairs (MCA) or do a quick online search to ensure the name isn’t already taken.
2. Apply for PAN (Permanent Account Number)
Every business in India, including a sole proprietorship, needs a PAN card. You can apply for a PAN card online through the official Income Tax Department website. If you already have a personal PAN, you can use it for your business.
3. Get a GST Registration (if applicable)
If your business turnover exceeds ₹20 lakhs (₹10 lakhs for some special category states), you will need to register for Goods and Services Tax (GST). This step is essential for businesses dealing with the sale of goods or services.
4. Open a Business Bank Account
A separate business bank account is important for maintaining clear records and managing finances efficiently. To open this account, you’ll need your PAN card, proof of business address, and other documents as per the bank’s requirements.
5. Obtain a Shop and Establishment Act License
In Bangalore, most businesses are required to register under the Shop and Establishment Act. This registration is done with the Labour Department. It helps in ensuring that your business complies with various labor laws, such as working hours, holidays, and wages.
6. Register for Professional Tax (PT)
Professional tax is a tax levied by the state government. In Karnataka, if you have employees working for you, you’ll need to register and pay professional tax. The amount varies based on your income and number of employees.
7. Other Licenses (if applicable)
Depending on the nature of your business, you may need additional licenses such as:
- Food License (FSSAI) for food-related businesses
- Import Export Code (IEC) for businesses involved in international trade
- Drug License for pharmaceutical businesses
