Proprietorship is an alias for the Proprietor to do business. Proprietorships are ideal for very small businesses in the unorganised sector. RandL offers proprietorship registration from Rs.3500/-
Easily Register a Proprietorship
Overview of Sole Proprietorship Registration
Limited Liability Partnership is a type of partnership firm which is mostly preferred by entrepreneur. It is the easiest form of business structure with the benefit of limited liability. LLP registration gives freedom to partners to form a partnership structure where the liability of each partner is limited to the amount they contribute into the business. Limited liability partnership firm registration means that if the partnership fails, creditors cannot ask for partner’s personal property or income.
Basic Requirements and Options Available for Sole Proprietorship Registration
Registering a sole proprietorship business is a digital process that can be accompanied with the help of an expert. However, a person interested in registering as a sole proprietorship requires fulfilling some basic requirements like opening a bank account in the name of the business entity, etc.
- Sole Proprietorship Registration through Udyog Aadhaar under Ministry of MSME
- Sole Proprietorship registration under Shop and Establishment Act
- Sole Proprietorship registration through GST Registration
Benefits of a Sole Proprietorship Firm
Every business structure has its own benefits. Some of the specific benefits of a Sole Proprietorship Business are given below:-
- Simplest form of Business
We generally come across various shops in our local places carrying out small business operations. They are the Sole Proprietorships who do not involve any complexities & can be hold by a single person in an easy manner.
- Easy to Start
You must note that Sole Proprietorships do not need mandatory registrations under the eye of law. They only require licenses or registrations specific to the nature of particular business. Therefore, any person can start his/her business very easily with a trade name of their own choice. Any trade name can be used until and unless it does not infringe with any brand name.
- Require Lesser Investment
Sole Proprietorships business needs minimal amount of investment in order to start at the initial phase. Therefore, it is a great opportunity for that entrepreneur who wishes to set up a business with low investments as no minimum capital is prescribed for starting a Proprietorship business.
- No sharing of Earned Profits
The sole proprietor is the only person who manages and operates the whole business, which means that 100% of the profits belong to only him/her. It is profitable to not that no one else is entitled to a share in the profits earned.
- Minimum Legal Compliances
It is important to note that the sole Proprietorships are not administered by any specific law; therefore the legal compliances are automatically minimal by its nature. They do not need to avail the Certificate of Incorporation or Registration Certificate from the concerned authority. Subsequently, the compliances depend upon licenses or registrations taken by a specific sole proprietorship.
To make it simpler, sole proprietorship have to comply with the GST return filing if it registers itself under GST law, or any other related laws. Therefore, there is no such obligation of uploading the Annual report or other reports on the website of Ministry of Corporate affairs.
- Minimum Income Tax
In general, no separate tax is needed to be paid by because the Sole Proprietorship involves only a Sole proprietor. Sole Proprietorship and the Sole proprietor are meant to be same or the purpose of calculation of tax liability. The assets & liabilities of the Sole Proprietorship are the assets as well as the liabilities of the Sole Proprietor.
In accordance to the Income Tax Act, the sole proprietor is needed to file his/her IT returns, showing the profits earned in the business in that IT return itself. It must be noted that the tax is calculated at income tax slab rates as applicable to an individual, therefore any separate return is not required for the Sole Proprietorship firm.
- Information Remains in Private hand
Unlike Limited Liability Partnerships, Companies, etc. where audit reports and financial statements are made public for the users via MCA (Known as Ministry of Corporate Affairs) portal, the financial reports of Sole Proprietorships remain in private hands. Also, the list of all sole proprietorships is not easily available with the Government officials/websites.
- Own Decision Making
It is important to note that there is no chance of conflict of ideas or any sort of decisions in view of the fact that the Sole Proprietorship is managed & operated single handedly. Sole Proprietors has the sole right to do whatsoever he/she thinks to do is correct for the business.
- No Requirement for Audit
Sole Proprietorship is not obligatory to get its accounts audited in each and every financial year under the eye of law. However, the audit will depend upon the nature of business & the threshold turnover limits that has been specified for the conduct of the audit for that particular firm.
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Benefits of a Sole Proprietorship
Sole Proprietorships have minimum compliance requirements as they are identified by government and tax registrations. Therefore, their agreements are confined to yearly filings of service, sales, or professional taxes.