A sole proprietorship is one person’s space as it’s a kind of business that has not been registered as a business entity. It is owned and managed by only one...
The Sole Proprietorship firm is a type of commercial enterprise that is owned and run by any one person and there is no involvement of different owner and business entity. In this type of business, the owner has the direct control of all the elements and he is the one who will be accountable for the finances and legal documents of the business. This might as well include the debts, loans, and losses etc. of the sole proprietorship firm.
In this type of structure of the business, the owner receives all the profits and also is responsible for all the risk factors. He is the only shareholder. All the assets and liabilities belong to the one and only owner of the sole proprietorship firm. However, the owner is allowed to use a trade name or a business name other than his own name to run the business and this is known as the legal name of the firm.
The Sole Proprietorship Registration can be done by any one person who wants to start his business with a less amount of investment involved in it. The general time frame to start such a firm is about 10-15 Days. This type of business allows the owner to have direct and 100% control over the business.
What Are The Advantages of Sole Proprietorship Registration?
Have a look at the following advantages that you may avail once you apply for the sole proprietorship registration of your firm.
- This involves just one person and there is no hassle of partnership coordination.
- The compliance involved in these types of the firm is minimum to start and run such firms.
- This type of commercial entity is very much less expensive to start the business in comparison to the others.
- The firm of this type is not required to pay corporate taxes.
- This type of ownership provides you direct and 100% control over the business so the decision making power is in one hand. Thus the decisions are easier and faster to make and implement.
Know the Disadvantages of Sole Proprietorship Registration
- The liability of the owner is unlimited in a sole proprietorship. He is the one who is personally liable for all the transactions being done on the name of the firm.
- Any casualty to the owner brings the threat of closure of sole proprietorship firm.
- Raising funds and capital is always a challenge for such types of firms.
The Registration Procedure for Sole Proprietorship:
- The first and primary step is to apply and get the PAN. However, if the owner has one then it is not required.
- The very next step is to give the name to the business or the firm.
- Then there is no formal requirement for the registration procedure for such firms but need to have a bank account in the name of the firm.
- After the opening of bank account you can register your firm under the Small and Medium Enterprise Act, however, it is not compulsory but advisable to do so.
- Then the last step is that if your turn over is more than 20 Lakhs, you need to register yourself for GST Regime. You can also get a shop and establishment Registration done if you want to get it done so.
The Required documents for Sole Proprietorship Registration Procedure are the utility bills of the place where the business is established, KYC details of the account of the firm, License of Shops and Establishments Act and also Income tax Returns of the proprietor of the sole proprietorship. If you want a hassle-free process for your Sole Proprietorship Registration then the best and easy way is to contact Swarit Advisors anytime whenever you need. Rest you can assure us as we have the best-specialized experts who can guide you in the best possible ways.