A business that is owned and run by a single person is known as a sole proprietorship. This type of business is gaining popularity in recent times because of its ease of set up and comparatively lower set-up costs. Few registrations that recognize sole proprietorships are GST registrations and local licenses. The sole proprietor has unlimited liability.
Most local and small businesses, like a stationary store or a grocery shop, take the form of the sole proprietorship. In case of large business units, the sole proprietorship is not much advisable as a business model.
The central registrations for a sole proprietorship can be done online. All states do not allow online registrations, though most of the major states allow.
As the name of a proprietorship is not registered, you can choose any name unless it infringes any registered trademark. But one drawback is that without registration of the name, someone else can use the same business name unless you obtain a trademark registration.
A proprietorship is the only business entity which can be registered and operated by one person. For registration, you need just one nominee Director and for other types of companies, two or more promoters are needed.
Proprietorship whose income is less than Rs. 3 lakhs don't need to pay any income tax. But, unlike a company or LLP, a proprietorship don't enjoy some of the tax deductions.
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