A Sole Proprietorship, also known as the sole trader, individual enterprneurship or Proprietorship, is a type of enterprise owned and run by one person and in which there is no legal distinction business and owner.
Features of Sole- Proprietorship:One man ownership.
Less formalities.
No Separation between ownership and management.
All profit or losses to the Proprieter.
In Sole proprietorship firm, proprietor is the sole owner of the firm and have direct access in the day to day opreations of the firm and the proprietor can make decisions as per his will which he deems fit for the benefits of firm.
There is quick decision-making in sole proprietorship as all the decisions are made by a single person, though in the case of need, he may consult others while making decisions.
there is a very high secrecy of information in sole proprietor as the sole proprietor is not bound to share the information of proprietorship firm with other. In many cases secrecy of information is quite helpful for business opreations.
Generally, minimum legal formalities are involved in setting up or closer of sole proprietorship firm.
Permanent Account Number (PAN) Card
Aadhaar Card / Passport / Driving License / Voter Identity Card
Passport size PhotographsNotes:
All the Copies of documents must be Self-Attested by the applicant.
Provide information about the address where the office of Proprietorship firm shall be situated.
Select a suitable package.
Provide basic details & documents required for registration.
Make Payment through Secured Payment Gateway
RegistrationFiling of application
Application of MSME and Udyam registration
Application for TAN
Registration in Shop and Establishment Act (optional)
Registered as Sole- Proprietorship FirmSole- Proprietorship Firm will be registered with 4-5 working days subject to the government processing and approval.
Provide basic details & documents required for registration.
Day 3-4:Filing of application
Application of MSME and Udyam registration
Application for TAN
Registration in Shop and Establishment Act (optional)
| Particulars | Sole Proprietorship | Partnership Firm | Private Company | Public Company | Limited Liability Partnership | One Person Company |
|---|---|---|---|---|---|---|
| Act | No specified Act | Indian Partnership Act, 1932 | Companies Act, 2013 | Companies Act, 2013 | Limited Liability Partnership Act, 2008 | Companies Act, 2013 |
| No. of Members | Only one | Minimum 2 to Maximum 50 | Minimum 2 to Maximum 50 | Minimum 7 to Unlimited | Minimum 2 to Unlimited | Only One |
| Registration | NO | Optional | Mandatory | Mandatory | Mandatory | Mandatory |
| Perpetual Succession | NO | No, if less than 2 partner | Yes | Yes | Yes | Yes |
| Management Control | Sole owner | Active Partners | Board of Directors | Board of Directors | Designated Partners | Sole member |
| Distribution of Profits | Profit of owner | Distributable as per deed | As per subscribed capital proportion | Distributable as dividend to Members | Distributable as per deed | Profit of Sole owner |
| Liability | Unlimited | Unlimited | Limited | Limited | Limited | Limited |
| Minimum Capital Requirement | Not specified | Not specified | No minimum capital is required | 5 Lakhs | Rs. 1/- | No minimum capital is required |
| Taxation | Slab Rates | 30% | 22% | 22% | 30% | 22% |
| Compliances | Less Compliance | Moderate | Moderate | High | Moderate | Moderate |
| Formation Process | Easy to Form | Easy to Form | Moderate | Complex | Moderate | Moderate |
| Foreign Direct Investment | Not allowed | Not allowed | Allowed | Allowed | Allowed | Allowed |
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