Standard Format of Affidavit of Sole Proprietorship

 

An Affidavit of Sole Proprietorship is a legal document used to formally declare that an individual is the sole owner of a business. It is typically typed on non-judicial stamp paper (usually Rs. 100 in India) and signed before a Notary Public. 

Standard Format

AFFIDAVIT

I, [Proprietor's Full Name], Son/Wife/Daughter of [Father's/Spouse's Name], aged about [Age] years, residing at [Residential Address], do hereby solemnly affirm and declare as under:

1. That I am the sole proprietor of the business running under the name and style of [Business Name], having its principal place of business/office located at [Business Address].
2. That the said business was established and commenced operations on [Date of starting business]. 
3. That I am the sole owner of the business and there are no other partners, members, or shareholders involved in the ownership of this firm. 
4. That I am solely responsible for all financial, operational, and legal liabilities incurred in the name of the said firm. 
5. That all the assets and properties of the business exclusively belong to me.
6. That I am fully authorized to operate bank accounts, sign contracts, and execute documents on behalf of [Business Name]. 

DEPONENT
(Signature of the Proprietor)

VERIFICATION

I, the above-named deponent, do hereby verify and declare that the contents of paragraphs 1 to 6 of this affidavit are true and correct to the best of my knowledge and belief, and nothing material has been concealed therefrom.

Verified at [City/Location] on this [Day] day of [Month], [Year]. 

DEPONENT
(Signature of the Proprietor)

ATTESTED BEFORE ME
(Signature and Seal of Notary Public)

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Key Guidelines for Execution

• Stamp Paper: Purchase a non-judicial stamp paper of the appropriate value required in your state (commonly Rs. 100).
• Notarization: Sign the affidavit in the presence of a Notary Public, who will verify your identity and attest the document.
• Requirements: This format is widely accepted for opening business bank accounts, applying for licenses (like FSSAI or Shop and Establishment), and government tenders. 

Compliance required for different business entities and cost incurred OPCs SPs Aops BoIs Charitable/Religious Trust, and Cooperative Societies.

 

To give you a complete picture under the Income Tax Act, 2025, here is the compliance framework, legal status, and cost breakdown for the remaining business structures: One Person Company (OPC), Sole Proprietorship (SP), Association of Persons (AOP), Body of Individuals (BOI), Charitable/Religious Trust, and Cooperative Societies.

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Comparison Matrix: Alternative Entities (FY 2026-27)

Entity Type	Legal Identity	PAN Status	Initial Setup Cost	Annual Compliance Cost	Primary Tax Return
One Person Company (OPC)	Distinct Entity	Separate (C)	₹10,000 - ₹15,000	₹25,000 - ₹40,000	ITR-6
Sole Proprietorship (SP)	Merged with Owner	Personal (P)	₹2,000 - ₹4,000	₹3,000 - ₹6,000	ITR-3 / ITR-4
AOP / BOI	Separate for Tax	Separate (A)	₹4,000 - ₹7,000	₹10,000 - ₹20,000	ITR-5
Public/Private Trust	Distinct Juristic	Separate (T)	₹8,000 - ₹15,000	₹15,000 - ₹30,000	ITR-7
Cooperative Society	Distinct Entity	Separate (B)	₹10,000 - ₹20,000	₹20,000 - ₹40,000	ITR-5

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1. One Person Company (OPC)

An OPC is a hybrid structure designed for solo founders who want the elite status of a Private Limited company but own 100% of the shares.

• Why it fits: Perfect if you want a separate "C" corporate PAN without needing a business partner.
• Key Compliance:
  • Must hold a minimum of two Board Meetings a year.
  • Mandatory Statutory Audit by a Chartered Accountant every single year.
  • Annual filing of financial statements with the MCA using Form AOC-4 and Form MGT-7A (streamlined for small companies).

2. Sole Proprietorship (SP)

As established, this is the easiest structure with the absolute lowest compliance costs.

• Why it fits: Best for pure freelancing or small-scale real estate consulting.
• Key Compliance: No corporate filings. You simply file your individual income tax return (ITR-3 or ITR-4 under presumptive taxation schemes like Section 44AD) by July 31st. A tax audit is only triggered if your turnover exceeds the ₹2 Crore threshold.

3. Association of Persons (AOP) & Body of Individuals (BOI)

An AOP consists of two or more distinct legal entities (like a company and an individual joining hands), while a BOI consists purely of a group of natural human beings co-investing together without a formal partnership deed.

• Why it fits: Frequently used in real estate for single-project Joint Ventures (JV) or consortiums formed to bid on a specific plot of land.
• Key Compliance:
  • Requires drafting an AOP/BOI Agreement.
  • Must apply for a dedicated "A" PAN card.
  • File ITR-5 annually by July 31st. They are taxed at the Maximum Marginal Rate (MMR) of 30% if the individual shares of the members are indeterminate.

4. Charitable or Religious Trust

A Trust is established to manage property or funds dedicated to a social, educational, religious, or charitable cause.

• Why it fits: It cannot be used for your commercial real estate consulting or development business. It can only be used if you are constructing public schools, community halls, or temples.
• Key Compliance:
  • Execution and registration of a Trust Deed with the local Sub-Registrar.
  • Mandatory registration under the Income Tax Act to claim exemptions on donations.
  • Mandatory annual audit if total income exceeds the basic exemption limit.
  • Filing of ITR-7 by October 31st.

5. Cooperative Societies

A Cooperative Society is a voluntary association of individuals who join together with a common economic objective (e.g., housing, farming, or banking).

• Why it fits: Extremely common in real estate as Cooperative Housing Societies (CHS), where apartment owners collectively manage building maintenance, or as groups pooling money to buy agricultural land.
• Key Compliance:
  • Registration under the State Cooperative Societies Act (requires a minimum of 10-20 distinct members from different families).
  • Mandatory Cooperative Audit conducted by a panel auditor appointed by the state government's Cooperative Department.
  • Annual filing of ITR-5. Cooperative societies benefit from special concessional tax rates under the modern tax regime.