What is a Sole Proprietorship?
When a business is owned and governed by one person, it is called a sole proprietorship company. This type of business can be incorporated in fifteen days and hence makes it one of the most popular types of business to begin in the unsystematic sector, specifically among merchants and small traders. For a Sole Proprietorship business, registration is not required as it is identified through alternate registrations, such as GST registrations. However, its liability is unlimited and it also doesn’t have perpetual existence.
Benefits of Sole Proprietorship?
Sole proprietorship firms offer a range of benefits that make them an attractive choice for many entrepreneurs. One of the primary advantages is the ease of setup, requiring minimal formalities and making it a cost-effective option for those starting a business. Sole proprietors enjoy full control over their enterprises, allowing for quick and flexible decision-making. Another significant benefit is the direct ownership of profits, as all earnings belong to the owner. Taxation is straightforward, with income typically reported on the owner's personal tax return, simplifying tax obligations. Additionally, the compliance requirements for sole proprietorships are minimal compared to larger business structures, reducing administrative burdens. Overall, sole proprietorships are a practical choice for individuals looking to establish a small business with simplicity and autonomy. However, it's important to consider the potential drawbacks, such as unlimited personal liability, when choosing this structure.
Document Required
- Address and identity proof
- Rent Agreement / NOC From Owner
- PAN card, KYC documents
- Rental agreement or sale deed (in case of Shops & Establishment Act Registration).
- Electricity Bill
- Pasport Size Photo
- Mobile No & Email ID