Sole Proprietorship?

Sole proprietorship, also known as a sole trader, an independent businessman or a business owner,is a type of business that is owned and controlled by a single person and in which there is no legal distinction between the owner and the business entity.

The sole trader shall receive all revenues (subject to company-specific taxation) and shall have unlimited liability for all losses and debts. Each asset of the business is the owner's assets, and all the debts of the business also belong to owners.

Advantages And Disadvantages Of Sole Proprietorship

• Easy to set up

  An Indian citizen may start proprietorships in India. Since no legal entity exists, the PAN Proprietors are used as the criterion for all registrations and enforcement. Udyog Aadhaar registration and Trademark Registration can be done using the promoter's PAN and Aadhaar to establish and secure the company identity.

• Sole Gain Beneficiary

  No business other than that of a sole owner and a company of one person shall be entitled to the owner as of the sole beneficiary of the profits. A minimum of at least two persons shall be involved in any other type of entity such as a partnership, LLP, or company.

• Compliance and Taxation

  Since a company is not registered with any government authority, such as the Ministry of Corporate Affairs, the requirements for compliance are marginal. In addition, the owner would only have to file tax returns if the organization had more than INR 2.5 lakhs of taxable income annually. In the case of owners who have reached the age of 60 years or more during the preceding year, the filing of income tax will only be required if the taxable income is more than INR 3 lakhs. In the case of owners who have reached the age of 80 years or more during the preceding year, the filing of income tax would only be required if the taxable income is more thanINR 5 lakhs.

• Why is sole proprietorship better than partnership?

  It's easier to operate:As a single person is at the head of the table of affairs, it is easier to act as the individual will be the sole decision-maker, and there is no need to consider a myriad of opinions. There is no concept of a council meeting or approval by other individuals in a business firm.