Registering a sole proprietorship is one of the procedures that many individuals are interested in, the form of small individual business households is quite popular and chosen by many families. So what are the procedures related to registering a sole proprietorship in 2024? Please refer to the details in the article of Viet My Accounting below.

1. Viet My Accounting’s sole proprietorship registration service

Currently, the price of Viet My Accounting’s full package of business registration services is 1,200,000 VND, including the following full package fees:

• Fee for registering a sole proprietorship;
• Service fee for drafting a set of individual business registration documents;
• Service fee for submitting documents for customers to sign;
• Service fee for submitting documents to establish a sole proprietorship;
• Service fee for obtaining results and handing over business licenses;
• Notary service fee authorizes Viet My to carry out legal procedures with state agencies.

After completing all procedures, Viet My Accounting will transport documents back to the unit without any cost.

Using the individual business registration service of Viet My Accounting, you will avoid spending too much time and travel costs to prepare documents. Because many individuals who proactively do it will not understand the documents, procedures and travel costs to submit documents, along with that, it will take a lot of time to correct documents, supplement documents if the documents are incorrect. When using the individual business registration service of Viet My Accounting, you will also get it done quickly, professionally and reliably.

2. What is a sole proprietorship?

Pursuant to Article 79 of Decree 01/2021 of the Government on business registration, the definition of a sole proprietorship is stipulated as follows:

“A business household is registered by an individual or household members and is responsible for all of its business activities with all of its assets. In case household members register a business household, they shall authorize one member to represent the business household. The individual registering the business household, the person authorized by the household members to represent the business household is the owner of the business household”.

When starting a business, most people often wonder whether to establish a company or a sole proprietorship to suit their scale of operation. And do not understand the advantages and disadvantages of each type of business?

Specifically, the following individuals or households should register as a sole proprietorship instead of establishing a business:

• Individuals who do not need to use value-added tax (VAT) invoices to avoid complicated tax problems such as having to submit declarations, submit quarterly reports, financial reports, etc.
• For individuals or households with small business models and little capital;
• Individuals who need to legalize their business form to obtain a license when inspected by competent authorities;

Thus, the sole proprietorship form is a small business form that many individuals and households currently proactively register when doing business.

3. Documents and procedures for registering a sole proprietorship

For individuals and sole proprietorships, when registering a sole proprietorship, the following documents must be prepared:

• 1 copy of the application for registration of a sole proprietorship;
• A valid copy of the citizen identification card or passport of the business owner;
• A copy of the house rental contract or house loan contract or red book in the case where the household owner is the business address owner (not notarized).
• In case members of a household contribute capital to register a business household, the following additional documents are required:
  • A valid copy of the citizen identification card or passport of the household member;
  • A valid copy of the minutes of the household member meeting on the establishment of the business household;
  • A valid copy of the authorization letter of the household members for a member of the family to be the business owner;
• A power of attorney for the person submitting the application (if authorizing an individual to do so);
• Valid copy of practice certificate (if the business line requires a practice certificate).

4. Agency for registration of individual business households

Citizens can submit their application for registration of individual business households at the business registration office of the locality where the business is located. Citizens can submit it directly or submit it online via the public service of the Department of Planning and Investment of the province where the headquarters is located. With valid documents, the business registration office will send a notice to the business registration account of the household owner to schedule a date to pick up the papers. In case of incomplete documents, they will have to supplement or be rejected, and will also be notified in detail via the online account.

5. Time to process individual business registration procedures

Upon receiving the application, the Business Registration Authority shall give the applicant a receipt and issue a business registration certificate to the business household within 3 working days from the date of receipt of the valid application, if the business household meets the following conditions:

• The registered business line or profession is not prohibited from investment and business;
• The name of the business household is established in accordance with the provisions of Article 88 of Decree 01/2021 of the Government on business registration;
• Fully pay the business registration fee as prescribed.

With a valid application, within 3 working days from the date of receipt of the application, the Business Registration Authority must notify in writing the applicant or the person registering the business household. With an invalid application, it must clearly state the reasons and request amendments and supplements to the application.

If after 3 working days, the person registering the business household does not receive the business household registration certificate or does not receive a notice requesting amendments or supplements to the business household registration dossier, the person establishing the business household has the right to complain and denounce according to the provisions of the law on complaints and denunciations.

6. Notes when registering a sole proprietorship

Registering a sole proprietorship is simpler than establishing a business because it is less constrained by a certain framework. However, when carrying out the process, there are more obstacles. Because if there is a framework, there are written regulations, but if there is no framework, it depends on human factors.

For example, in the process of establishing a business household, depending on the officer handling the dossier, some problems will have completely different solutions. Or the decree does not stipulate that it is forbidden to name the business household in English, but at any state agency, English names will not be accepted. In addition, not all People’s Committees provide instructions on how to correct the name by adding a dot between the characters, so individuals must find out for themselves.

Specifically as follows:

6.1 Note on the registered subjects

According to the law, the subjects entitled to establish a sole proprietorship are individuals, household members who are Vietnamese citizens from 18 years of age and have full civil act capacity.

The representative of the household members whose name is on the business license is the business household owner.

A person can only have the name of one business household, nationwide. If a person has been the owner of a previous business household, even if it has not been in business for a long time but has not been dissolved, this person cannot have his/her name on the new business household (to have the name of a new business household, the old business household must be dissolved).

6.2 Note on naming a business household

Similar to establishing a business, a business household must also have its own name.

• The name of a business household includes 2 elements: Business Household and Private Name of the Business Household
• The name of a business household must not use the phrase “company” or “enterprise” because it can easily cause confusion with the type of business.
• The private name of a business household must not be the same as the private names of other registered business households within the district.
• Do not use English to name the business household. If used, ensure that there are periods between the characters.

6.3 Notes on business registration locations

A business household can conduct business activities at many different locations but must choose one location to register the business household’s headquarters. The remaining business locations must be notified to the Tax Administration Agency and the Market Management Agency where the business activities are conducted.

In case the address is a rented or borrowed house, it is necessary to verify clearly whether anyone has established a business household here before? If registered, have they dissolved the business household? To verify this, the homeowner should ask the District People’s Committee to ask. In case there is a registered business household that has not been dissolved, the homeowner can go to the District People’s Committee to request the dissolution of this business household on the grounds that the business household owner has left and is no longer operating here.

At the same time, note that the registered address of the business household absolutely cannot be an apartment building (except in the case of a business household registering for the purpose of renting out a house for residence). Or the address is located in a state planning area, then the business household cannot be established.

6.4 Notes on charter capital when registering a sole proprietorship

Currently, the law does not stipulate a minimum or maximum capital for a sole proprietorship. Therefore, the amount of capital to register depends on the individual and the business household’s ability, the scale, and the industry the registrant is aiming for. However, it should be noted that the responsibility for the risks of a sole proprietorship is unlimited responsibility, meaning that when there is a business risk, you must be responsible for all of your assets. Therefore, when deciding to register capital, you need to consider the future risks. If the business is not favorable, you must be responsible for all of your assets to pay, not just the capital you register.

In addition, sole proprietors should also register low capital, not too high capital because the tax authority will rely on the following 3 conditions to apply the monthly tax rate for sole proprietors:

• High or low capital;
• Where is the business location, is it in a favorable location, on the street or in an alley;
• Are the business items likely to sell well?

6.5 Notes on the maximum number of employees of a business household

According to the new regulations issued under Decree 01/2021/ND-CP, there is no longer a limit on the number of employees that a sole proprietorship is allowed to employ, which is completely different from the previous regulations when only a maximum of 9 employees was allowed.

6.6 Notes on business registration lines

Business households are entitled to register many business lines.

Business households are entitled to conduct business in conditional investment and business lines from the time they meet the conditions, but must ensure that they meet those conditions throughout the operation process.

Thus, when registering a business household, the business household owner also needs to consider the factors that are allowed and not allowed during the operation process as well as on paper. When clearly understanding this, it will help the business household avoid disadvantages during the registration process as well as the operation.

The above are the findings of Viet My Accounting on the regulations for registering a sole proprietorship. Hopefully, with the above information, readers will better understand the procedures for registering individual business households or can contact VIET MY LAW AND ACCOUNTING when having questions about related business registration procedures. Please contact Viet My Accounting if you want to get quick and convenient individual business registration service.