How To Register A Sole Proprietorship In Uganda

What Is A Sole Proprietorship?

A sole proprietorship, also known as a sole tradership, individual entrepreneurship or proprietorship, is a type of enterprise owned and run by one person and in which there is no legal distinction between the owner and the business entity.

How To Register A Sole Proprietorship In Uganda?

A sole proprietorship is a business owned and managed by a single individual. The business owner takes all the profits and losses.

The following are steps to follow in registering sole proprietorship business in Uganda

  • Conduct a name search. This process takes between two days to two weeks. You are required to fill a form at Uganda Registration Services Bureau (URSB).Charges for this service is Ush 2,000.
  • Once the Uganda Registration Services Bureau (URSB) confirms that your name is unique and non-existence in their system, they reserve it until you fully register your business. Name reservation is done once an individual fills a form and submits it to the Uganda Registration Services Bureau. The fully filled form is returned to the same institution together with a fee which should not exceed Ush 23,000.The amount should be paid at the bank.
  • Business name
  • Nature of the business
  • Name, surname, nationality and place of residence
  • Name reservation takes 30 days. If the period elapses, an individual must do reservation again; this must include the name reservation fees.
  • Log in to Uganda Revenue Authority website and obtain form which will enable you fill the details, submit and wait for your URA pin. This pin is very important, especially when applying for a tender.
  • Once you have submitter the required details to the Uganda Registration Services Bureau (URSB), wait for one month to confirm whether you are fully registered.

Registering A Sole Proprietorship Name In Uganda

Registering your Sole Proprietorship name is being done at the Registrar’s office, and it takes two days to complete and costs UGX 25,000.

The following registration procedures include 

  • Paying registration fees at the given bank (around Ugx 100,000 + Ugx2,500 bank charges)
  • Registering at the Uganda Revenue Authority’s local office where you gain a Tax Identification Number(TIN), or registering online via URA E-Service‍

Taxation System For Sole Proprietors In Uganda

If monthly chargeable income does not exceed Ugx 235,000, no income tax is charged.

If monthly chargeable income exceeds Ugx235,000, the income tax is charged on the following schedule:

  • For monthly income Ugx 235,000 -Ugx 410,000 : Ugx 10,000 monthly plus 20% on the amount that exceeds 335,000.
  • For monthly income over Ugx 410,000: Ugx 25,000 and 30% of the amount that exceeds Ugx 410,000 a month.

Vat For Sole Proprietors In Uganda

Anyone whose annual revenue exceeds Ugx 150 million is legally obliged to register with the authorities for VAT (Value Added Tax) payments with the Uganda Revenue Authority. The VAT rate stands at 18%.Also, entities whose revenue is less than Ugx150 million can voluntarily register with the Uganda Revenue Authority.You can find more detailed information about the tax obligations on the URA (Uganda Revenue Authority) website.Uganda Revenue Authority has come up with the E-Service, a new and digitalized way of registering for tax, calculating the taxes, and paying them all online and all immediately and in that way reducing a significant amount of time a taxpayer would waste waiting in the queues.

What Are The Documents Required For Registration Of Sole Proprietorship?

  • Aadhar Card. Aadhar number is now a necessity for applying for any registration in Uganda
  • PAN Card. You can’t file your income tax return until you get a PAN.
  • Bank Account.
  • Registered Office Proof.
  • Registering as SME.
  • Shop and Establishment Act License.
  • GST Registration.

How Do I Set Up Myself As A Sole Proprietorship?

  1. Choose a business name.
  2. Register your business name.
  3. Purchase a website domain name.
  4. Obtain a business license and other permits.
  5. File for an employer identification number (EIN)
  6. Open a business bank account.
  7. Get insurance coverage.

What Are Mandatory Requirements For Sole Proprietorship?

Checklist required for Sole Proprietorship

PAN Card of the proprietor. Name and address of the business. Bank Account in the name of the business. Registration under the Shop and Establishment Act of the respective state.

Does Sole Proprietorship Have Employees?

Like other small business owners, sole proprietors do have the ability to hire employees. As per the IRS, any time a sole proprietor hires an employee other than an independent contractor, the sole proprietorship will need to obtain an Employer Identification Number (EIN).

Is Self Employed And Sole Proprietorship The Same?

A sole proprietor is self-employed because they operate their own business. When you are self-employed, you do not work for an employer that pays a consistent wage or salary but rather you earn income by contracting with and providing goods or services to various clients.

What Are The Disadvantages To Being A Sole Proprietor?

  • No liability protection.
  • Financing and business credit is harder to procure.
  • Selling is a challenge.
  • Unlimited liability.
  • Raising capital can be challenging.
  • Lack of financial control and difficulty tracking expenses.

How Do I Register My Sole Proprietorship Online Business?

  1. PAN card (Permanent Account Number) and valid government recognized ID proof (passport, voter card, aadhar, etc.)
  2. Bank statement or a copy of a cancelled cheque.
  3. Copy of electricity bill/ landline bill, water bill.

Can I Sell Online With Sole Proprietorship?

Sole proprietorship registration can be done online with help from various entities. You can also do it yourself by approaching your nearest municipal corporation office. You must prepare the required documents ass listed above and fill up a registration form, submit an undertaking and pay the required fees.

What Is Registration Certificate Of Proprietorship?

Sole Proprietorship Firm Registration is Single Person Firm Registration i.e is the main objective is Open Current Bank Account on the Name of Business so it’s a simply firm which is enable doing business in India with Less Compliance and Less Costing.

Does Sole Proprietor Need Current Account?

Current account is not a requirement. You can use savings account. You would need to pay taxes on interest. Savings account have limitation on number of withdrawal in a quarter, hence most sole proprietorship have current account.

What Are Advantages Of A Sole Proprietorship?

  • Taxes: You don’t need to separate taxes for your business.
  • Maintenance: A sole proprietorship is easier to start and maintain than a registered business.
  • Control: The sole proprietor has complete control and decision-making power over the business.

Why A Sole Proprietorship Is Best?

Easy and inexpensive to form: A sole proprietorship is the simplest and least expensive business structure to establish. Complete control. Because you are the sole owner of the business, you have complete control over all decisions.