Also known as a proprietorship or a sole trader, a sole proprietorship is an unincorporated business which has got only one owner and he remains liable to pay the personal income tax that he earns from the business profits. Numerous sole proprietors continue their businesses under their names as they do not feel the need to create separate trade or business names. Sole proprietorships are the easiest kind of business for taking apart or establishing in the absence of government regulation. So, these kinds of businesses are hugely prevalent among consultants, sole business owners, and individual self-contractors.
The importance of sole proprietorship registration
When a sole proprietorship conducts a business using a different name in place of the owner’s full name, it becomes important to have sole proprietorship registration online. To register a sole proprietorship you must get the documents mentioned below:
- Get the pertinent application form and you will be required to submit a couple of documents for this purpose; an application form for registering the sole proprietorship business name and an application form for getting the needed report on the business name registration.
- Submit the certified report and the duly finished application form besides the registration fee. The Divisional Secretary is entitled to receive them.
- When you consider the above-mentioned documents, you will get the Certificate of Registration from the Divisional Secretary.
The benefits of a sole proprietorship
There are several benefits of sole proprietorship like:
- Funding – This kind of business structure depends on the savings, credit history, and borrowings of a person. As no other person is involved, raising funds become very tough. Again, raising equity funds does not seem possible because this kind of business entity refuses to permit shareholding or profit sharing.
- Business continuity – If the business owner becomes disabled or dies, the sole proprietorship dissolves automatically. So, there will be no continuity of the business.
- Personal liability – When a proprietorship can’t pay taxes or business loans, the business owner’s assets can be burdened or attached. So, in this kind of business structure, the proprietor remains personally liable until and unless every liability becomes extinguished.
- Growth – The proprietorship has different restrictions related to liability, business continuity, and fundraising. So, only the small businesses that remain in the chaotic sector do operate in the form of proprietorship.
In the India, a sole proprietorship is viewed as a common business structure and a survey has discovered that 59 percent of owners of small businesses do their job as a sole proprietorship. This states the importance of sole proprietorship registration online. Sole proprietorship registration and other compliance issues can be comfortably resolved online with the help of experts in this domain like UComply.