SOLE PROPRIETOR BUSINESS REGISTRATION AND TAX COMPLIANCES

One of the business model is to start and register your business in Individual Capacity which terms as Sole Proprietorship (while a Single Member Private Company is a separate business model). Sole Proprietor performs and work independently and enjoys all benefits without sharing with any other partner / shareholder, and it is its one of the core benefit of the Sole Proprietor business model. Income Tax Return Filing method is also very similar to that of Partnership Firm or Company with the addition of Wealth Statement filing for the Sole Proprietor.

REGISTRATION OF A SOLE PROPRIETOR WITH REGULATORY BODDIES

With less compliances and working under no regulatory framework as like Partnership Firms (works under Partnership Act 1932), Private Companies (works under Companies Act 2017), and Sole Proprietor Business has to be registered in the following Government Departments/ Regulatory Bodies

I. FBR (for NTN REGISTRATION)

II. FBR (For Sales Tax (GST) if the person is selling goods)

III. PRA / SRB / KPRA/BRA (For Sales Tax if the person is selling Services)

IV. CUSTOMS DEPARTMET (works under FBR) through PSW (Pakistan Single Window) if the person is / to be involved in IMPORT / EXPORT

V. EXCISE & TAXATION DEPARTMENT for payment of professional taxation.

VI. CHAMBER OF COMMERCE like LCCI, KCCI. Its optional.

VII. IPO for Trade Mark registration. It’s not mandatory but optional. If the Sole Proprietor is keen to save and protect his business Goodwill and BRAND NAME then he (SOLE PROPRIETOR) must register his brand name / TRADE MARK (LOGO) / PATENT / DESIGNS / COPYRIGHT on time before its gets too late.

VIII. EOBI if the Sole Proprietor business exceed 5 or more employees in his entity then he is liable to be registered with this Department.

IX. PESSI / SESSI / KPK SOCIAL SECURITY / BALUCHISTAN SOCIAL SECURITY if the Sole Proprietor business has any of the employee who is getting Salary in his entity as defined in relevant province Social Security Law (Rs.22,500 for PESSI) then he is liable to be registered with SOCIAL SECURITY Department.

X. OTHER LABOR LAWS as per defined limit and applicability.

TAX COMPLIANCES FOR A SOLE PROPRIETOR

Once a Sole Proprietor gets registered in any of the above department then he (SOLE PROPRIETOR) shall bound to make compliances of that regulatory body as per the relevant law.

Here is the details of Tax Compliances which any of the Sole Proprietor Business shall have to make mandatory regardless of his business volume and business sector.