Often termed as “One Man Business Entity”, Sole Proprietorship is the most popular type of business to begin in the unsystematic sector, specifically among micro and small businessmen, traders or merchants due to its simple structure and slab-wise tax benefit. The majority of the unorganized sectors prefer going for online Sole Proprietorship registration.
A sole proprietorship business does not need any specific registration. However, it is advised to get a few essential registrations to make the business function in a better way like registration in Shop and Establishment Act, a GST registration or a Udyog Aadhaar under MSME The process can be completed within the time span of 10-15 days. It’s easy to start as fewer formalities are required & less wastage of time for taking various approvals. Also, it has minimum compliance that is required to be adhered to get it incorporated.
- Online Sole proprietorship registration is the easiest and most inexpensive form of registration to get. A sole proprietor has full control over business decisions, provided they are within legal parameters. Despite the fact that an owner might carry a special business name, the owner receives all profits that the business generates and has total liability for all losses and debts.
- A sole proprietorship has no separate existence. All debts can only be recovered from the sole proprietor. A sole proprietor does not have any partners or shareholders; therefore he/she bears direct responsibility for all elements of the business and is fully accountable for all finances, including debts, loans, and losses.
- Online Sole proprietorship registration is best suited to only small businesses because the owner has unlimited liability with regard to all the debts which heavily discourage any risk-taking.
- It isn’t easy to raise capital to scale the business in Sole proprietorship. Sole proprietors have limited avenues for raising capital such as Investment of own savings, taking out loans to support the business, advances from commercial banks or borrowing from finance companies. Also, there is no way of Raising Equity Capital.
- Sole Proprietorship can also hamper growth with time. After all, it’s difficult to build a big business as a single person. So, if one is looking to expand his/her business then it is advisable that this structure should be converted to another form once achieving growth to a sustainable level. It is very common for sole proprietors to convert their business into partnerships and private limited companies after the business starts growing. The conversion process is a little bit tiresome but it’s possible and you can always choose to do so.
Sole proprietorship holds many benefits as compared to other structures for those people who are starting a new business with comparatively fewer risks. It is best for small and medium businesses or for professionals who do not want to be associated with others.
We know the fact that registration in this field is not a cup of tea as the information is always scattered across different sites. Super CA is always here to assist you. Our team comprises legal experts, advisors, professional CAs and CSS who are always there with you in every course of action. We guarantee a hassle-free quick & easy process with 100% accuracy in documents at the minimum possible cost.