Sole Proprietorship Registration

Sole Proprietorship Registration by Sigma Solutions

Introduction

In 2024, a passionate home baker began receiving overwhelming demand for her artisan cakes and homemade baked goods through social media. With word-of-mouth popularity growing and frequent bulk orders from cafés and local stores, she realized the need to transition from an informal home business to a registered entity.

Her objectives were clear:

Establish business legitimacy
Access wholesale ingredients at better pricing
Open a dedicated business bank account
Acquire the FSSAI license to meet food safety standards
Position herself for future expansion and branding

After evaluating various business structures like LLP, OPC, and Private Limited Company, she chose to register as a Sole Proprietorship—the most cost-effective and low-compliance option for solo entrepreneurs.

That’s when she connected with Sigma Solutions to make her transition smooth, legal, and future-ready.

Challenges Faced by the Founders

Despite her culinary talent, the entrepreneur lacked the technical knowledge and legal clarity required to formalize her business.

1. No Formal Business Identity

She had been:

Accepting orders via WhatsApp and Instagram
Operating informally with no GST, business PAN, or registration
Unable to register with marketplaces like Zomato, Swiggy, or Amazon Food

2. Ineligibility for Bulk Supplies & Credit

Suppliers required:

GST registration
Business bank account
Proof of registration under MSME or a local authority

3. Tax & Financial Confusion

She was unsure about:

Whether she needed GST for selling cakes locally
The process for getting a PAN in business name
Income tax filing and TDS requirements for a sole proprietor

4. Licensing & Brand Protection

She wanted to:

Get FSSAI approval for food safety compliance
Explore trademarking her bakery brand name in the future
Obtain a Shop & Establishment License to legally operate from a rented kitchen

5. Limited Marketing & Expansion Strategy

Without a brand or digital footprint, she couldn’t:

Launch on food delivery platforms
Advertise confidently or display certifications

Track sales and scale professionally

Solution Provided by Sigma Solutions

Sigma Solutions provided a comprehensive Sole Proprietorship registration and business setup package, tailored specifically for small-scale food entrepreneurs and home-based businesses.

The service included:

Business advisory
Documentation & legal setup
Tax registration
Licensing support
Banking, compliance & digital growth strategies

Implementation Strategy

1. Business Structuring & Legal Advisory

Conducted a detailed consultation to:
- Compare Sole Proprietorship with LLP, OPC, and Pvt. Ltd.
- Explain the advantages (ease of formation, low compliance, full control) and limitations (no separate legal entity, personal liability)
- Suggested a distinct trade name and its usage in PAN, GST, and marketing
Identified the following required licenses and registrations:
- Udyam MSME Registration
- GST for taxable turnover above ₹20 lakhs
- FSSAI for food licensing
- Shop & Establishment License for local authority approval

2. Legal Registration & Documentation

Collected and verified:
- Aadhar, PAN, Passport-sized photo
- Business address proof (rental agreement, electricity bill)
- Trade name and bakery business details
Registered:
- MSME Udyam Registration under food production category (NIC Code 107)
- Applied for new PAN linked to the business name
- Filed Professional Tax application (if applicable for region)

3. GST Registration & Tax Setup

Applied for voluntary GST registration to:
- Claim input tax credit on raw materials
- Enable B2B transactions with wholesalers and retailers
- Comply with food delivery aggregator onboarding requirements
Explained:
- How to generate invoices with GSTIN
- Maintain records for quarterly filings and ITR-3

4. Licensing & Brand Compliance

Applied for:
- FSSAI Basic Registration (Turnover < ₹12 lakhs)
- Shop & Establishment License under the State Shops and Establishments Act
Advised on:
- Trademark registration steps (optional) for brand protection
- Packaging and labelling as per FSSAI guidelines

5. Banking & Financial Structuring

Helped open a business current account using:
- Udyam Certificate
- GST Certificate
- PAN
- FSSAI License
- KYC documents
Educated on:
- Cash flow management
- Record keeping for small businesses
- Using basic accounting tools (Tally, Zoho Books)

6. Marketing & Growth Strategy

Provided a digital roadmap to scale, including:
- Branding support for her bakery’s name and logo
- Registering on platforms like Zomato, Swiggy, and MagicPin
- Starting Instagram & WhatsApp Business profiles
- Advising on local influencer partnerships

Results Achieved

Officially Registered Business	GST, Udyam, PAN, and Shop License issued within 5 working days
Banking & Supplier Access	Business current account opened, wholesale purchases enabled
FSSAI Compliant	Successfully obtained FSSAI license, boosting customer trust
Marketing-Ready	Digital presence created; prepared for Swiggy/Zomato onboarding
Financial Literacy Improved	Gained knowledge of tax filing, invoicing, and basic bookkeeping

Conclusion & Key Takeaways

Registering as a Sole Proprietorship is one of the best options for solo entrepreneurs, home-based businesses, and service professionals who want to start small with minimal compliance. However, even simple structures require proper documentation, tax compliance, and licensing.

Sigma Solutions played a critical role in transforming a home-based hobby into a legally recognized food business, ready for digital expansion and growth.

Key Insights:

Sole Proprietorship is ideal for individuals starting out on a budget
FSSAI + GST + Udyam = Full operational legitimacy for food businesses
Basic bookkeeping and digital presence are vital for scaling
Sigma Solutions simplifies registration, so entrepreneurs can focus on their craft