A sole proprietorship business is one of the most preferred business ownership. A single person takes over the assets and the affairs of the business. A sole proprietor needs to get his accounts audited as per section 44AB if his gross receipts for a period of one year exceed Rs 1 crore.
Advantages of a proprietorship registration
Easy to form and less expensive
There are no such specific registration requirements for a proprietorship firm registration. The identity of the owner is used by the business. Registration can be obtained using the PAN and Aadhaar of the business owner.
The proprietorship form of business is simplified and less expensive.
The owner holds the responsibility of the business. As the owner owns responsibility for the business, he/she is the sole beneficiary of profits. The owner is the sole decision-maker and need not pay much heed to opinions.
The sole proprietorship firm is not registered with any of the Government authorities like the Ministry of Corporate Affairs. There are very minimal compliance requirements. The income of the sole proprietor is recorded as self-employment earning under Schedule C of the federal tax returns. The sole proprietor only has to pay taxes on his earnings.
There are various employment opportunities as the owner is self-employed. Business secrets can be kept as the ownership of the business is in the hands of a single person
100% in profits
Another reason why a proprietorship business is preferred by most entrepreneurs is that they enjoy the benefits keeping 100% of the company’s profits.
No restriction for a business name
In a proprietorship firm, the proprietor does not have any restriction in choosing a name for the business, he/she can choose any name of their choice.
A sole proprietorship is the simplest form of business as there is no legal entity governing the business. Only one person is solely responsible for the business and its growth.
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