Sole Proprietorship Concern
Sole proprietorship, also known as sole trader or a proprietorship that is owned and managed by a single person who is also the owner of the concern. Proprietorships are very easy to start and have very minimum compliance requirement for day to day operations. Here the owner is in direct control of the business and is liable for all the finances of such business which may include debts, loans, loss, etc. There is no separate mechanism for registration of proprietorship concern. However such an existence is govern only through tax registration and other business registrations that a proprietorship is requires to have as per rules and regulations.
Advantages of Sole Proprietorship Concern:
Fast Decision making process
- In sole proprietorship concern, there is one single owner. So the decision making will be fast as he/she has a complete control over business.
- Sole proprietorship concerns are not governed by Companies Act. So there is no corporate tax payment. However sole proprietor has to pay a tax structure under Individual tax bracket (i.e. Up to 2.5 lakhs-NIL)
- Sole proprietorship concern does not require legal compliances as in case of company.
FAQ on Sole Proprietorship Concern:
What are documents required for registration of sole proprietorship concern?
- ID Proof –(Voter ID/Aadhar/Passport) – any 1
- Address Proof (Electricity Bill/Telephone Bill/Bank Statement)-Any 1
Do I need CA to start my sole proprietorship?
- Yes, a CA will help you to get tax registration, manage your accounts and file your tax returns.
Will I be personally liable for all my debts?
- As a sole proprietor, you will be personally liable.
Does service tax, VAT is automatically applicable to sole proprietor?
- No, these are applicable after crossing certain threshold limits.