|
|
What is a Sole Proprietorship?
A sole proprietorship is one of the most common and oldest forms of business in India. It is a single-person establishment wherein an individual owns, manages, controls, implements, and executes his/her business on their own. It is also known as individual entrepreneurship, sole trader, or simply proprietorship.
A sole proprietorship does not require any registration but to gain tax benefits people do register their firm. Further, the trademark registration is recommended, in case the name of the business is unique or brandable.
In a sole proprietorship there is no separate legal entity between the sole proprietor and the business property. The liability of the sole member is unlimited which means when business profits are not sufficient for set off the losses of the business then the personal property of the sole owner should be used for setting off the losses.
Features of Sole Proprietorship Firm:
- One Person required as single entrepreneur.
- Single owner of the business.
- Easy to start and easy to close.
- Complete control.
- Nominal cost of formation and compliances
Advantages of Sole Proprietorships Firm:
- Easiest and cheapest way to start a business
- No sharing of profit
- Low capital required
- Full management control
- Few government rules and laws
Disadvantages of Sole Proprietorships Firm:
- Unlimited liability
- No perpetual succession
- Difficult to raise funds
Annual Compliances Required:
- File Income tax return
- TDS return filing
- GST returns
- Annual ROC filing
- Finalize financial statements
Documents required for Sole Proprietorship firm Registration:
- PAN card
- Name of business
- Current account in the name of proprietorship in bank
- Business address proof Bill required
- The license under Shop Act
For more details contact out team at +91-7991109093 or drop email us at [email protected]
Note: This Post was last updated on January 28, 2023
Disclaimer: The entire contents of this document have been prepared on the basis of relevant provisions and as per the information existing at the time of the preparation i.e. January 28, 2023. Although care has been taken to ensure the accuracy, completeness and reliability of the information provided, We assume no responsibility therefore. Users of this information are expected to refer to the relevant existing provisions of applicable Laws. The user of the information agrees that the information is not a professional advice and is subject to change without notice. We assume no responsibility for the consequences of use of such information. IN NO EVENT SHALL WE SHALL BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL OR INCIDENTAL DAMAGE RESULTING FROM, ARISING OUT OF OR IN CONNECTION WITH THE USE OF THE INFORMATION.
