Sole Proprietorship Firm

An unregistered business entity started, owned and managed by an individual only is known as a sole proprietorship firm. The identity of an individual and that of the business are not different from each other. Proprietorship Firm are very easy and have lower tax rate, flexibility and very minimal regulatory compliance requirement for starting and operating it. Small businesses aiming to take lower risks prefer this structure.

Although there is no specific Act to regulate this organization, there are many ways to register a Sole Proprietorship firm. The proprietorship firm must be established through tax registrations such as GST Registration and other business registrations that a business is required to have as per the rules and regulations of Government of India. All the registrations for a proprietorship firm would be in the name of the Proprietor, making the Proprietor personally liable for all the liabilities of the Proprietorship.

Benefits

Easy to form

  • Requires minimal registration and formalities.
  • Cost of sole proprietorship registration is less.
  • Proprietor can run any legal business in his own name or with a different legal name as brand.

Its You and Only You

  • The proprietor has all the rights of what to do and how to operate.
  • He doesn’t need to report someone.
  • No interference of third party
  • Minimal compliance or disclosures requirements. Hence, Government interference is also less.
  • Owns the entire share of Profit
  • Business assets are treated as Proprietor assets and vice versa

Easy to Close

There is no formality in winding up or closing the proprietorship as the proprietor and the proprietorship are same for all legal purposes. In most of the cases only tax registration obtained in the name of proprietor must be cancelled.

Business Name

  • A proprietor can choose any name as long as it does not infringe on a registered trademark.

Tax Benefit

  • Requires minimal registration and formalities.
  • Cost of sole proprietorship registration is less.
  • Proprietor can run any legal business in his own name or with a different legal name as brand.
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Documents Required

1.

Identity Proof

A self - attested copy of PAN Card of Proprietor .

2.

Address Proof

A self – attested copy of aadhar card of proprietor or bank statement or electricity bill not older than 2 months.

3.

Bank Details

Details of the saving or current account of bank.

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