Who is a Sole Proprietor?
A proprietor is the owner of the Sole Proprietorship business. The proprietor and the proprietorship are the same legal entity. The proprietor is held personally liable in case of any liabilities in a business. The Proprietor must be an Indian citizen and a Resident of India.
What is Sole Proprietorship?
Sole Proprietorship means a business carried on by one person. It is the simplest and easiest form of business since it is not governed by any specific laws and the compliances are minimal and easy to fulfill. The decision-making and management of the business is in the hands of a single person. It is not a corporate or legal entity.
A sole proprietor is the owner and is personally liable for all the debts and liabilities of the business. It is also like an Individual giving a business name for himself to perform business activities professionally. A sole proprietor is an unincorporated business owned exclusively by one person. Most of the micro and small businesses operating in the unorganized sectors prefer registering a Proprietorship.
Sole Proprietorship Registration
There is no such legal registration under any law to set up a Sole Proprietorship. But one can apply for several registrations under various laws to avoid any complicated scenario.
1. Registration under the Shop and Establishment Act – Registering under shop & establishment as per local laws prevailing in the area where Sole Proprietorship is located.
2. Registration under Udyog Aadhaar (Ministry of MSME) – It is required in the case of Micro, Small, and Medium Enterprises.
3. Registration under GST (Goods and Service Tax)–It is required in case the turnover of the business exceeds the specified limit. The limit is ₹ 40 lakhs for a supplier of goods and ₹ 20 lakhs for service providers (limit is ₹ 20 lakhs and ₹ 10 lakhs, respectively for specified States).
4. Trademark Registration – There is no requirement for forming a legal entity or business entity to register a trademark. Trademark can be a name, logo, shape, trade dress, sound, and smell, basically anything which identifies the source of origin for goods or services. It distinguishes you from others. –
“A trademark is not just a mark, it is an asset. Brand value is the most important asset for any company, it adds up the company’s valuation and sales”
Top 5 Benefits of a Sole Proprietorship Registration
1. Full ownership – The owner has full control over everything. He is answerable to no one else. He decides everything in the best interests of the business. Right or wrong, he takes charge of the situation.
2. Easy to establish – The establishment of a sole proprietorship is generally an easy and inexpensive process.
3. Simpler taxes – Unlike the shareholders of corporations, the owner of a sole proprietorship is taxed only once. The sole proprietor pays only the personal income tax on the profits earned by the entity. The entity itself does not have to pay income tax.
4. Fewer compliances – Unlike corporations, the entities do not need to spend time and resources on various government compliances.
5. Quick Decisions – Proprietors can take quick steps and dispose of things promptly. Unlike companies, they do not require Board member’s or shareholders’ approval.
It is easy to start a small business by forming a Sole Proprietorship with minimal complexities. It is a good option for those who want to provide a platform to their business idea and try out something they want to with minimal investment.
Sole Proprietorship Registration is an online process. No physical documents are required to be submitted.
For Your Firm Registration as a Sole Proprietorship, we will get it done with a hassle-free online registration process by our experienced professionals WITHIN JUST 7 DAYS.
You just need to share your details with us over HERE and we will take care of all the time-taking messy documentation for you.
While you read your favorite book on entrepreneurship and sip your coffee.