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Proprietorship Registration

Proprietorship Registration

Rs 2000/- onwards

Who is a sole proprietor?

As the name signifies sole proprietor is the natural person financing, managing and carrying out all related operations of his business solely. He runs his venture, bears all the risks and gains and becomes the masters of his business. He can adopt a trade name or business name which is other than his legal name to separate his personal connection.

Who prefers the sole proprietorship?

Generally the small businessmen prefer to enter into sole proprietorship. This is because:

  • It do not have any complexities involved
  • Owner is the sole earner of all the profits
  • Control is not diluted and stays in one hand only
  • Quick decision undertaking
  • Personal touch and thus customer satisfaction

Does sole proprietor have to register somewhere before starting a business? If no, then how can it start its business?

No there is no such legal act which lays down the procedure for a sole proprietor to get registered. Anyone can start his or her proprietorship business if one has got idea as well as funds. The commercial activity can be related to providing services or selling some goods. All you need is a place to start say a bay, shop or outlet or an empty room in your house if the commercial activity is allowed in your area.

What are the prerequisites of sole proprietorship business?

To start a sole proprietorship there are some things which one needs to possess along with ideas, funds and a business location which are:

  • Permanent Account Number of the person starting the business
  • Bank Account in trade name
  • Sales tax number called as Tax Identification Number (TIN) if the business is of selling taxable goods
  • Service Tax Registration number if the condition of exceeding the threshold limit is fulfilled

These things will give recognition to the business.

What are the business options available to sole proprietor?

A sole proprietor can:

  • start a outlet selling readymade goods
  • take up franchise of any known brand
  • provide services depending upon skills and qualification
  • be contractors or builders
  • initiate a little manufacturing factory

Describe some of the crucial features of sole proprietorship?

  • Unlimited liability: The sole proprietor has unlimited liability which means that his private assets can also be taken in account in case he fails to pay all the liabilities of his business. The personal house, jewellery, motor vehicles can be sold out if the dues are not cleared.
  • King of the business: The sole proprietor is the king of his own business. He manages all the operations, arranges for the desired funds, takes healthy decision in the interest of his business and is the beneficiary of all the gains and earnings.
  • No Separate Legal Entity: The sole proprietor and his business are regarded same in the eyes of law. Unlike companies there is no distinct identity.
  • Sole proprietor and income tax: The income tax also acknowledges the sole proprietor and his venture as same and therefore the income of the business is deemed as income of the person running the business and he is taxed at individual slab rates.

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