SOLE PROPRIETORSHIP

 

The sole proprietorship is the simplest business form under which one can operate a business. The sole proprietorship is not a legal entity. It simply refers to a person who owns the business and is personally responsible for its debts.

 

The biggest advantage is that it is easier to make both “Start and Exit” in the proprietorship form of doing business. The Proprietorship form makes sense when the entity wants to commence the business with the self-owned funds without resorting to external funding sources in the form of Equity.

 

Documents Required for a Sole Proprietorship Firm

  1. Permanent Account Number of the Proprietor
  2. Selection of Business Firm Name
  3. Address Proof for Place of Business
  4. MSME/GST/TAN registration for opening of the bank account.

 

Advantages

  1. Easy to start as its formation does not require any regulatory  approval.
  2. Compliance is almost negligible.
    3.     Exemption from maintaining complete books of account in case    of Income declaration under Presumptive Income Basis up to     Rs. 2 Crores.
  3. Exemption from Audit up to Rs. 50 Lacs in case of service organization and Rs. 100 Lacs in case of others or under Income declaration under presumptive basis as above.
  4. Overall Lower Cost of Operation
  5. Easy to wind up the operations if required.
    7. Tax Benefit as Sole Proprietorship does not bear any separate entity status. The Income Tax Liability is arrived after providing for available Income Tax exemption limit in the hands of the       Individual Proprietor.

 

Disadvantages

  1. Difficulty in accessing the External Finance in the form of Debt and Equity
  2. Minimal Compliance
  3. Unlimited Liability of Proprietor, even extending to personal assets.

 

Best Fit for:

  1. Generally for new Start-Up Venture looking to start the operations with self-owned money.
  2. Small organizations which cannot afford the compliance cost and issues involved.
  3. Entrepreneurs which want a complete secrecy of their financial and proprietary information.

 

 

LEGALLANDS LLP consistently endeavours to get together the necessities and prerequisites of its customers and demonstrate to be a beneficiary aid as and at whatever point required. To bring more subtleties on same, contact our client assistance official today at connect@legallands.com

 

Disclaimer

 

As per the rules of the Bar Council of India, we are not permitted to solicit work and advertise. By clicking “I agree” below, you acknowledge the following:

 

  • There has been no advertisement, personal communication, solicitation, invitation or inducement of any sort whatsoever from us or any of our members to solicit any work through this website;

  • The user wishes to gain more information about us for his/her own information and use;

  • The information about us is provided to the user only on his/her specific request and any information obtained or materials downloaded from this website is completely at the user’s volition and any transmission, receipt or use of this site would not create any lawyer-client relationship.

The information provided under this website is solely available at your request for informational purposes only, should not be interpreted as soliciting or advertisement. We are not liable for any consequence of any action taken by the user relying on material/information provided under this website. In cases where the user has any legal issues, he/she in all cases must seek independent legal advice.