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Sole Proprietorship
Sole proprietorship is a type of business which is entirely run by one person and in which there is no legal distinction between the owner and the entity. It is one of the oldest forms of business in India. The person who manages this type of business is solely and personally responsible for the debts.
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Advantages of Sole Proprietorship Company
No Governing Law
It is not governed by a separate law and there aren’t many rules and regulations to follow. There is no need of incorporation or registration compulsorily. Generally, a licence to operate suffices as one of the most reliable mediums of existence of sole proprietorship.
No Profit Sharing
Owner enjoys the entire profits from the business. He doesn’t need to share them with any other person as he is the sole stakeholder. He can withdraw the profits from the business for his own use.
Easy to Form
It can be established easily and instantly.
Quick Decision Making
The decisions made are quicker as the sole proprietor has complete control over the entire business
Confidentiality
There is a great deal of confidentiality in the proprietorship business as the law doesn’t require a proprietorship to publish its financial accounts or any other such documents for availability of the general public.
Less Formalities
Very less formalities are involved in the sole proprietorship business.
Tax Benefits
As per the Income Tax Act, 1961, sole proprietors can take the benefit of paying lower taxes and declaring incomes on presumptive basis where the books of accounts are not maintained.
Less Compliance Cost
It is inexpensive as compared to other forms due to its fewer compliance requirements.
Sense of Satisfaction
It gives great sense of satisfaction and achievement to the owner to be its own boss and not being answerable to anyone. It is a great boost to the self-worth of the owner.
Who and why should youopt for it?
It is an idol form of business for any small-scale operator as they are saved from all kinds of legal formalities in every defined law. The ease of its operation and management also makes people opt for this form of business.
Process of Sole ProprietorshipRegistration
There are generally no compulsory registrations required to be taken by the Sole Proprietor. However, following voluntary registrations may be taken if the owner wishes to expand the business:
If the supplier is engaged in providing taxable intra-state supply of goods and services and the aggregate turnover exceeds the specified limit OR engaged in providing inter-state supply of goods or services OR wishes to take voluntary registration, he may register under GST. This gives the owner the benefit to avail loans, declare the turnover to have a record, avail credits and expand the business.
After getting the certificate of GST Registration, the Owner can get the Bank Account opened in the name of the sole proprietorship. Banks accept GST Registration Form and Number as a valid proof for opening bank account in the trade name of the proprietorship.
Shop and Establishment Act is covered under state legislation and each state has its own rules and regulations for the same. Since rules are framed by the state government, they will differ from state to state.
All the shops, hotels, eating houses, restaurant, theatres, places of public amusement or establishment and any other commercial establishment etc. are covered under the Shop and Establishment Act and are required to obtain registration under it. Within 30 days of the commencement of establishment, registration under Shop and Establishment needs to be applied.
Trademark refers to brand or logo. It can also be obtained for a business name, distinctive catchy phrases, taglines or captions. Trademark Registration can help prevent repetition or duplication of goods or service by competitors or other persons. It also ensures that the investment put into the business and efforts are protected from unidentified sources.
Documents required for Incorporation
- ID Proof: ID Proof of the Owner
- Address Proof : Address Proof of the Owner
- Rent Agreement: Rent Agreement of the Business Premises
- Photograph: Passport Size Photograph of the Owner
- Utility bill: Utility bill for the premises
- No Objection Certificate: No Objection Certificate from the owner of the premises (if the premises is not owned)
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Business Goal
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How Taxified Can Help You?
- Registration under GST law
- Connecting with Empanelled bankers for bank account opening
- Registration under Shop & Establishment
- Trademark Registration