Owned, controlled, and managed by one single person, Sole Proprietorship is the form of business that is very frequently found in India. Having very minimal legal compliance needs in the initial stage, this format of business offers itself to be started with ease and least efforts.Nevertheless, beyond the startup stage, this form doesn’t provide many other benefits as offered by other organizational forms.
For instance, proprietorships do not offer desirable features expected by entrepreneurs, namely, separate legal entity, free existence, easy transferability, and limited liability. Such factors render Proprietorship to be suited particularly for the unorganized sector of small businesses having limited existence.
Proprietorships do not involve any separate or specific registration. They get their recognition mostly from other registrations, namely, sales tax or service tax registration. Having the ease of easy startup, proprietorship is ridden with severe shortcomings such as unlimited liability of the proprietor, and not having continuous existence.
Since no mechanism has been provided legally by the Government toward incorporation or registration of proprietorship in India, its existence can only be established through tax and other business registrations which a proprietor is needed to possess according to regulations and rules.
Requiring no separate registration, a proprietorship is one of the easiest forms of businesses that consists no fixed formalities.
As Sole Proprietorships are normally recognized through tax and governmental registrations only, compliance needs are limited to just the filing of their sales, service, or professional taxes annually.
Being unregistered, the proprietorship name renders itself to be freely chosen – allowing any party to select any name unless and until it creates infringement on some registered trademark. This may at time act as a drawback, since others may as well use the business name if trademark registration has not been done
o In case of proprietorships having an annual income less than Rs.2 Lakhs, there is no income tax since proprietorships get taxed through the individual who owns the business.It is to be noted that businesses with income more than Rs.10 Lakhs per year do not face major benefits with relation to taxation.
With Apnalegal, it is possible for entrepreneurs to get proprietorship in multiple ways- we facilitate this through various registrations including VAT, Professional tax registration, service tax registration, and so on.
We have acquired an experienced team of business experts who will guide you through all the necessary processes and get your registration done smoothly.
Apnalegal happens to be one of the leading online business service providers focused on assisting potential entrepreneurs in easily starting and effectively managing their businesses.
Proprietorship Registration with Service Tax Department.
Proprietorship Registration with Sales Tax Department.
Proprietorship Registration with Import Export Department, MSME under Udyog Aadhaar and trademark registration.