A sole proprietorship (also known as a sole trader) is a business run by an individual. There is no separate legal entity; the owner takes all of the profits and / or losses of the business. The owner also has all the control and all the liability and debts from the business. The owner is the final decision maker and has no interference. The business taxes are paid by the owner through his or her personal income tax return. Sole traders can benefit from lower tax rates. The obvious disadvantage of this business structure is that there is unlimited liability of the owner and in case of lawsuits and other debts, the owner is personally held liable. A sole proprietorship is different from partnerships and limited companies. A basic sole proprietorship is also different from a Single Member Company (SMC) which is a limited liability company with one owner. Not sure about which business structure to choose?
In order to register a basic sole proprietorship all you need to do is:
- (1) Think of a name for your business
- (2) Make a letterhead and business card with business name, logo, phone number and physical office address on it.
- (3) Take your cnic, letterhead/business card, and a stamp with your new business name to any bank of your choice.
- (4) They will open a bank account for you in the name of your business and give you confirmation with account details (account maintenance / welcome letter) – NOT MANDATORY.
- (5) You can then take this letter along with other docs to FBR in your district/city who will issue you a NTN and/or GST (if you don’t have it already). Alternatively this can be done online on FBR website and will require scan copies of all documents. Please note you will require a valid cell phone number, email address, rent agreement of your office and electricity bill.
- (6) Once your NTN is issued then you can apply for your GST Number which usually takes 1 working day.
- (7) Congratulations! You are now a registered sole proprietor.
- (8) Note there is no official certificate issued by any authority in case of a sole proprietorship. You will only receive a NTN certificate with your name & details on it.
Still need help? We can help you with sole proprietorship registration for as low as Rs. 5,000* only. Call us on 0345-1234-867 or email us. We make sure that our customers always get served quickly and effectively without charging a fortune other lawyers and agents would otherwise charge.
Documents we require:
- Full name and colour CNIC copy of sole proprietor.
- Nature and scope of business.
- Business letterhead.
- Business account in any bank of your choice (this must be in the name of the business–provide letter from bank as proof ) – NOT MANDATORY.
- Electricity bill (we recommend commercial meter).
- Rent agreement of office (we recommend commercial area).
- Residential address of sole proprietor.
- Mobile number of applicant that is not registered before with FBR.
- Email address of applicant that is not registered before with FBR.