A Sole Trader/Proprietor is owned and operated by one person with no legal distinction between the owner and the business entity. Sole proprietors are usually considered to be micro or small businesses many of which are home-based. Examples include health care practitioners, computer and mobile repairs, catering, domestic sanitation services, freelancers, and virtual assistants.
How can I become registered as a Sole Trader?
1. Name Approval /Name Reservation
In selecting a name for your business, one must be mindful not to use any word or phrase that may be considered obscene, immoral or suggestive. The Registration of Business Name Act section 16 gives the registrar the power to cancel or refuse any business name. Your business name must be distinctive. It must not cause confusion or be misleading.
5. (1) Every firm or person required under this Act to be registered shall furnish to the Registrar a statement in writing in the prescribed form containing the following particulars:
(a) the business name;
(b) the general nature of the business;
(c) the principal place of the business;
(d) where the registration to be effected is that of a firm, the present given name and surname, any former given name or surname, the nationality, the usual residence, and the other business occupation (if any) of each of the individuals who are partners, and the corporate name and registered or principal office of every corporation
which is a partner;
(e) where the registration to be effected is that of an individual, the present given name and surname, any former given name or surname, the nationality, the usual residence, and the other business occupation (if any) of such individual;
(f) where the registration to be effected is that of a corporation, its corporate name and registered or principal office;
(g) if the business is commenced after the commencement of this Act, the date of the commencement of the business.
(2) Where a business is carried on under two or more business names, each of those business names must be stated.
2. Name Search
The second step to having your business registered is having a name search done. A name search refers to the process by which the registrar ensures the availability of the business name chosen by the proprietor. A name search also takes into consideration how close the chosen name is to other names in the directory. The Companies Registry Online Search Facility allows individuals to search for company names prior to seeking approval.
3. Registration Certificates
Upon completion of the registration, the new business owner would now be provided with a legal business registration certificate with a unique number.
While having the certificate validates the company in the registry, there are some more items to solidify your status as a business:
1. Board of Inland Revenue (BIR) Registration
A BIR Number is an identification number used by the Board of Inland Revenue (BIR) in the administration of tax laws. Once your business has been registered an AI-001 form can be filled out and submitted to the BIR office to have a designated number assigned. This Board of Inland Revenue file number would be used in the payment of taxes such as Health surcharge, Paye, Corporation tax, Green Fund and Business Levy.
2. Bank Account Application
This process involves filling out a commercial bank account application form from the bank of choice. This account can be used as a record of all financial transactions of the business. Requirements include:
1- 3 year Cash Flow Projection
A cash flow projection is a breakdown of the money that is expected to come in and out of your business. This includes calculating your income and all of your expenses, which will give your business a clear idea on how much cash you’ll be left with over a specific period of time.
Opening Balance Sheet
An opening balance sheet contains the beginning balances at the start of a reporting period. If a business has just begun, then the opening balance sheet will contain no account balances at all, or perhaps the equity contributions (and offsetting cash balances) of investors.
3. Company stamp
Once the registration process is complete a simple business stamp bearing the business’ full name can now be acquired. This stamp would be used on applications like the Commercial Account Application mentioned above and many others.
At kazicompany.com our experienced professionals are here to help you with your business registration and acquisition of the items above. Go to business registration, complete the application form and one of our representatives will contact you.