Register a proprietorship company easily.
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A sole proprietorship is a form of business structure that best suits small businesses that can be owned and managed by a single individual.
The sole proprietorship is very easy to set up with minimum legal compliances required than other forms of business and as such it is very popular in the unorganized sector.
There is no specific process for registration of sole proprietorship needed. A sole proprietorship is usually recognized by the allied registrations like GST registrations or government licenses acquired to conduct specific businesses.
One of the biggest drawbacks of sole proprietorship is that it comes with unlimited liability i.e if the assets of your business does not compensate your debt then your personal assets will be attached to pay that debt or liability.
The compliance is usually limited to the filing of annual returns in the form of service, professional or sales tax according to the nature of business run.
Step 1- Applying for the PAN (If you have a PAN you are successfully completed with step 1)
Step 2- Name your business
Step 3- Open a bank account in the Name of the business
FAQs On Sole Proprietorship
1. What is a sole proprietorship
A sole proprietorship is a company with only one owner and is not registered with the state, unlike a limited liability company (LLC) or corporation. Starting a sole proprietorship requires no paperwork — all you do to create a sole proprietorship is simply go into business. Although you do not have to file paperwork to set up a sole proprietorship, you do still have to acquire business licenses and permits, just like with any other form of business. Most people use the term “DBA” which stands for “doing business as” to indicate a sole proprietorship.
2. How does a sole proprietorship differ from other company forms?
A sole proprietorship differs from other forms of business in several ways. The chief ways a sole proprietorship is different include:
3. How are sole proprietorships treated for tax purposes?
Unlike corporations, sole proprietorships are not treated separately by the IRS. This means that any profit derived from your sole proprietorship is treated as your personal income and is accounted for on your individual tax return. Any such income is taxed to you in the year it was received.
4. Am I personally liable for my business under a sole proprietorship?
Yes. Unlike other forms of incorporation, you are personally liable for any of your sole proprietorship’s debts or legal judgments against your business. This means that in order to satisfy debts owed by your business, debt collectors can come after your personal assets — homes, cars, etc. For this reason alone, you should be extremely cautious about setting up a sole proprietorship.
5. Do I need an attorney to help me start a sole proprietorship?
Not necessarily. But every business is unique and there may be circumstances where a partnership, LLC, or some other kind of business structure is a better fit.
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