A sole proprietorship is a business that can be owned and controlled by an individual, a company or a limited liability partnership. There are no partners in the business.
The sole proprietorship is the “One Man Business Entity”. It is owned, controlled and managed by a single person called the proprietor. The proprietor owns the business in his own name under his own PAN number. He is personally liable for his debts. The sole proprietorship and proprietor are one and the same thing.
Advantages of Sole Proprietorship
- The Proprietor will be legally recognized as a Supplier of Goods & Services.
- The proprietor can claim the Input tax credit (tax paid on the purchase of goods & services).
- The proprietor can pass on the credit of the taxes paid on the supply of the goods & services to the purchaser.
- He can make Interstate sales without restrictions.
- The proprietor can have a competitive advantage in comparison to other businesses.
- Small businesses ( having a turnover of less than 1 crore) can opt for a composition scheme to lower their taxes.
- In GST, the number of compliances is less as it has replaced all other indirect taxes.
Documents Required for Sole Proprietorship
- PAN Card of the Owner.
- Adhar card of the Owner.
- Photograph of the owner.
- Address Proof