When a business is owned and governed by one person it is called a sole proprietorship company. This type of business can be started in 15 days and hence makes it one of the most popular kinds of business to begin in the unsystematic sector, specifically among merchants and small traders. For a sole proprietorship business, registrations are not required as they are identified by alternate registrations such as GST registrations. However, its liability is unlimited and it also doesn’t have a continuous presence.
Sole Proprietorships have minimum compliance as this firm is identified by its government and tax registrations. Therefore, the degree of its agreement is confined to the yearly filing of the service, sales or professional taxes.
Any sole proprietorship is simple to begin. One needs to simply have a GST Registration in place. Hence, the procedure is not complicated. Therefore, the sole proprietorship business can be set up in 15 days with the help of a PAN card for identity and proof of address.
When compared to an OPC or One Person Company, a Sole Proprietorship is economical due to its minimum compliance requisites. Even in the long-term perspective, it is still inexpensive. It works out much cheaper because one would not need to hire an auditor. One of the main reasons why small merchants and traders choose it
Any Indian citizen with a current account in the name of their business can start a sole proprietorship. Registration may or may not be required, depending on what business you are planning to establish. However, to open a current account, banks typically require a Shops & Establishments Registration.
To open a current account, you need proof of the existence of your business. Most banks will ask for a Shops & Establishments Act Registration. In addition, you will need a PAN card and address and identity proofs.
A sole proprietorship business does not take more than 15 days to open-up and get running. This simplicity makes it popular among the small traders and merchants. It's also much cheaper, of course. This is the other reason why it's the most widely used business structure.
Most local businesses are run as sole proprietorships, from your grocery store to a fast food vendor, and even small traders and manufacturers. This is not to say that larger businesses do not operate as sole proprietors. Even some jewellery shops are sole proprietors, but this is not recommended.
This depends on the business you're in. It is compulsory for any business whose turnover in a financial year exceeds Rs 20 lakhs (Rs 10 lakhs in the case of North Eastern states) to get a GST registration. For businesses that are involved in selling goods or services to customers out of a commercial establishment, it is mandatory to register under Shops and Establishments Act.
Yes, it is much cheaper to run an LLP than a private limited company, particularly in your early start-up days. This is because many compliances, such as an audit, apply to LLPs only after their turnover is sizeable. Most LLPs spend about half as much as a private limited company in their first year on registrations and compliance work.
You can always choose to do so. The procedure is a little tedious, but it is possible. It is very common for sole proprietors to convert into partnerships and private limited companies at a later stage.
Our experts give your professional guidance on the many processes involved in registering your business as a sole proprietorship, whether its service tax, sales tax, import/export code, professional tax or Shops and Establishments Act registration.
Our team will put you in touch with an established vendor who will book your application and also keep you in the loop on its status and progress. The vendors we have onboard are well-accomplished and skilful in managing native registrations.
INDIA TAX will offer full assistance until you get the registration you've have chosen. In some cases, this could take up to 15 days but 5 days in a few others, as this is completely dependent on the task at hand for the authorities involved