1. No Mandatory Business Registration

• A sole proprietorship does not need to be registered under the Companies Act
  
• It can legally begin operations without incorporation or formal approval from the Ministry of Corporate Affairs
  
• The business operates in the owner’s name or under a chosen trade name
  
• The owner and the business are treated as the same legal entity
  
• However, other forms of regulatory registration may still apply

2. Business Name Usage

• The owner can choose any unique trade name, though it is not mandatory to register it separately
  
• The name should not infringe on existing trademarks or registered businesses
  
• Trade names can be used on invoices, signage, and marketing materials
  
• If branding is important, trademark registration is recommended
  
• A consistent business name builds recognition and credibility

3. Mandatory Licenses and Local Registrations

• Depending on the location and business type, certain licenses are legally required:
  
  • Shops and Establishment Act license (mandatory in most states for physical premises)
    
  • A trade license from the local municipal authority for certain activities
    
  • Professional Tax Registration, depending on the state and employee count
    
• These licenses provide basic legal standing and are needed to open a current bank account
  
• Compliance with local laws ensures smooth business operation and avoids penalties

4. Industry-Specific and Operational Registrations

• Additional registrations are needed based on the business nature:
  
  • GST Registration (mandatory if turnover exceeds ₹40 lakh for goods or ₹20 lakh for services, or for interstate supply)
    
  • FSSAI License for food-related businesses
    
  • Import Export Code (IEC) for international trade
    
  • Udyam Registration for recognition as an MSME (optional but beneficial)
    
  • Sector-specific approvals or environmental clearances, where applicable

5. Banking, Recordkeeping, and Compliance

• Opening a current account in the business name usually requires at least two business proofs (e.g., GST, Shop License)
  
• The proprietor must maintain proper records of income, expenses, and transactions
  
• If applicable, the business must file returns (GST, TDS, etc.) and comply with audit requirements
  
• While not mandatory, using accounting software or professional services is advised
  
• Timely compliance with all applicable laws builds trust and ensures business continuity