The sole proprietorship or sole traders is a type of enterprise that is owned and run by an individual. This is a type of business where there is no legal difference between the business entity and the owner. However, Sri Lanka is an excellent place for this kind of business. To register your sole proprietorship in Sri Lanka, you need to follow some documented procedures.

Firstly, you need to head to the– “Business Registration Department” within your region to collect the application form.

The application form is a 3-page document. The first two pages of the document are written in Tamil and Sinhalese with English translation. But the 3rd page of the document is written in Tamil and Sinhalese. If you don’t know Tamil or Sinhalese, you need to find someone who can translate Sri Lankan Local language.

List of Document for Sole Proprietorship Registration

You will need to prepare and submit various types of document to register your sole proprietorship. All the listing of documents is discussed below –

Completed form of application– The necessary application form can be downloaded from the government website, or it can also be collected from the government office of company registration. You will be asked to print the application double sided to minimize the page number.

Validation form Grama Niladhari and Grama Sevaka– It is required to sign the 3rd page of the application from Grama Niladhari and Grama Sevaka, to verify your business address. Generally, they will check the owner of the property, i.e., address within your application. If they found the owner of the property is valid, they will sign your form.

Letter of consent from resident owner– There is no need of consentient letter if the deed is in your name. But if you are a renter, you need to sign the consent letter from the resident owner. Copies of resident owner id card & copies of applicant id card must be submitted with consent letter.

House tax invoice copy – this is required for conforming the resident of the stated address.

Original deed–only for the revision in the validation of the property of the declared business address.

Important points to consider

You must send the request within 14 days after the signing of Grama Niladhari and Sevaka. If you do not submit the application within the period of time, you will receive a fine of LKR 2500 per delay per day. The government fees to register a sole proprietorship are LKR 2500.

My personal experience

When I sent my forms, the registration department officer noticed that I had a five-month delay. The officer directed me to another gentleman who was very polite and helpful. He explained everything about the policies for registering companies. However, I managed to convince him and paid a fine of only 4,500 LKR for the delay. The gentleman took my number and called me the next night saying my registration document is ready.

Advantage of a sole proprietorship

Control: the sole trader has all the power of his business. They can run the business without the interface of others.

Private information: the confidential information of the single merchants can be kept private, unlike other companies that need to make a public announcement after the company’s registration.

Personnel: Since it is not necessary to discuss with other decision makers, sole traders can make decisions quickly and act quickly to meet the needs of their customers.

Disadvantage of a sole proprietorship

Decision making: unique traders make all decisions. There are no opportunities to get help from others. The success or failure of the company depends on a person.

Finance: The sole trader may find it difficult to raise the bottom of his business. Sometimes they may face problems with the expansion of their business.

Also read: Overseas company registration in Sri Lanka