What is a Sole Proprietorship Registration?
The sole proprietorship is the simplest business form under which one can operate a business. The sole proprietorship is not a legal entity. It simply refers to a person who owns the business and is personally responsible for its debts. A sole proprietorship can operate under the name of its owner or it can do business under a fictitious name, such as Nancy's Nail Salon.
The fictitious name is simply a trade name. it does not create a legal entity separate from the sole proprietor owner. The sole proprietorship is a popular business form due to its simplicity, ease of setup, and nominal cost. A sole proprietor need only register his or her name and secure local licenses, and the sole proprietor is ready for business.
A distinct disadvantage, however, is that the owner of a sole proprietorship remains personally liable for all the business's debts. So, if a sole proprietor business runs into financial trouble, creditors can bring lawsuits against the business owner. If such suits are successful, the owner will have to pay the business debts with his or her own money.
Advantages of Sole Proprietorship
- Ease of Formation
- Control over decision making
- Tax Benefits
- PAN Card & Aadhar Card of Sole Proprietor – Mandatory
- Passport Size Photo (In Jpeg Format) of all Sole Proprietor.
- Proof of Residence of Sole Proprietor. (Telephone Bill, Electricity Bill, Mobile Bill, Bank Statement, etc.)
- Proof of registered office address in India (Electricity Bill, Telephone Bill, Maintenance Receipt (Rent Agreement if place taken on rent)
- NOC from the owner of the registered office address. (If place on Rent)