You've jumped into the business world for yourself. You don't have excess paperwork to start a sole proprietorship. But there are some important things you need to know before starting your journey in entrepreneur’s world.
A sole proprietorship is most preferred for of business entity as it is simplest and easiest form of business to register and to maintain. There is no formal set of rules and regulation for sole proprietorship registration. However, in order to run a business, there are certain requirements that are needed to fulfill.
A sole proprietorship is kind of business entity which solely owned, controlled and managed by a single person. It is the easiest way of running business, with the ease of registration process and with lease compliances responsibilities.
Sole proprietorship is the most common form of business practiced in India and is not governed by any specific book of laws. Proprietor has the whole rights of the business to himself in terms of legal formalities, decision making, finance etc.
There is no limited liability in case of sole proprietorship. As the proprietor and the proprietorship firm is treated as the same entity, the person who manages the business is the sole director as well as the shareholder and the proprietor can also sign the agreements or contacts in his name even if the business is registered under any other name. Also, the proprietor can use their personal accounts requirements.
Any individual who is want to commence a business with low capital should choose this kind of business form. Sole Proprietorship business is mostly preferred by small businesses holders such as retail, wholesale, etc. Such businesses have the simple business plan, nominal or the least financial risk and have small product market. The business with a little or minimal capital requirements can also prefer to start their work as Sole Proprietorship.
Nowadays, Proprietorships are also required to register itself under Tax laws such as GST Registration, if it falls under a certain category. A sole proprietor registration can be done by registering their business in -
• GST registration
• MSME registration
• Shop and Establishment
There are different registrations, licenses and permits to start your business that will be required along with the above registrations. This requirement depends on the kind of business an individual wants to run. For example, to start your food business as a proprietorship, you might need to register with FSSAI or get FSSAI License.