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The sole proprietorship is the simplest form of business under which one can operate a business. The owner of the Business is called Sole Proprietor of the Firm. As the business is run by a natural person, there is no legal difference between the promoter and the business. The promoter himself receives all the profits. A sole proprietorship can operate under the name of its owner or it can do business under a fictitious name.
It is very easy to start as there are less legal formalities and lesser formation costs involved.
The registration of a proprietorship can only be recognized through tax registrations, that the business is obligatory to have as per the rules and regulations. These tax registrations may include GST Registration and SSI/MSME Registration that should be obtained in the name of the Proprietor so that the government can establish that, the Proprietor is operating a business as a sole proprietorship.
Sole proprietorship firm can be started by any individual, able to make sound decisions.
No. All registrations are completely paperless and online. Government provide all services online so that you don’t need to move an inch from your office or home.
Yes. It is very common for sole proprietors to convert into partnerships and private limited companies at a later stage of their businesses. The procedure is very simple.
A Sole Proprietorship business does not take more time to start functioning. This simplicity makes it popular among small traders and merchants. It’s also much cheaper. This is the other reason why it’s the most widely used business structure.
This depends on the business you’re in. It is compulsory for any business whose turnover in a financial year exceeds Rs 20 lakhs (Rs 10 lakhs in the case of North Eastern states) to get a GST registration. For businesses that are involved in selling goods or services to customers out of a commercial establishment, it is mandatory to register under Shops and Establishments Act.