Last date to file ITR for Individuals is 31 August 2019

SOLE PROPRIETORSHIP

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Sole Proprietorship
A sole proprietorship is an unincorporated enterprise that is owned and run by one natural person and in which there is no legal distinction between the owner and the business entity. 
The sole proprietorship is not a legal entity. It simply refers to a person who owns the business and is personally responsible for its debts.
A sole proprietor may use a trade name or business name other than his, her, or its legal name. They may have to legally trademark their business name if it differs from their own legal name, the process varying depending upon country of residence.
The owner of a sole proprietorship typically signs contracts in his or her own name, because the sole proprietorship has no separate identity under the law. The sole proprietor owner will typically have customers write checks in the owner's name, even if the business uses a fictitious name. Sole proprietor owners can, and often do, mingle personal and business property and funds, something that partnerships, LLPs & Companies cannot do.

 

The advantages of a sole proprietorship include:
Because a sole proprietorship is indistinguishable from its owner, sole proprietorship taxation is quite simple. The income earned by a sole proprietorship is income earned by its owner.
i. Owners can establish a sole proprietorship instantly and easily.
ii. Sole proprietorships carry little, if any, ongoing formalities.
iii. Owners may freely mix business or personal assets.

 

The disadvantages of a sole proprietorship include:

 

i. Owners are subject to unlimited personal liability for the debts, losses and liabilities of the business.
ii. Owners cannot raise capital by selling an interest in the business.
iii. Sole proprietorships rarely survive the death or incapacity of their owners and so do not retain value.

 

Starting Sole Proprietorship

 

There is no government registration needed in order to start a sole proprietorship business in India. You don’t have to go to an online registration portal and fill up a form or submit any documents. However, you do need to open a current account with a bank in the name of the business.
A current account in turn requires that you have a specified location from which you are doing business. The bank will ask you to submit documents as proof of business location in the form of government registrations such as Shop & Establishment act license, Goods & Service Tax (GST) Certificate, CA Certificate etc.

 

Registration of Sole Proprietorship Business in India

You don’t need to register your sole proprietorship in India. But in order to receive payments in the name of the business, you need to open a current account in a bank. For this, you will need proof of existence of the firm, and the address proof. Documents needed include:
1. Pan card and ID for address proof of proprietor.
2. Business address proof (eg: electricity bill in your name, or electricity bill + registered rental agreement, etc.)
3. Government registration documents confirming name and address of business (Shop & Establishment act license, Goods & Service Tax (GST) Certificate, CA Certificate etc.)
4. CA Certificate – You can get this from any CA. They might charge you a nominal fee for giving you a certificate.

 

We can help you in starting Sole Proprietorship in no time contact us