The First Step Towards Becoming The Owner
Are you thinking about the company’s name? Then you must also think about the suffix that will go with the name. Stepping into the business world without registering your business will restrain it from all the added benefits that come with incorporating your business. Company incorporation refers to the process of officially registering your company with the government. The company is registered under Section 7 of Companies Act 2013. It defines the structure of your business based on its ownership. But what if you are the sole owner of your business? Do you still need to register it? The answer is “Yes, with Sole Proprietorship registration.”
What is Sole Proprietorship?
A sole proprietorship business has a single owner. The entity is managed and under the control of that same individual. The sole owner is obligated and liable to the business endlessly while also being the sole owner of all the profit made. This type of incorporation is apt for businesses managed and owned by only one individual. Some of the common sole proprietorship examples are small shops, local bakeries, salons, etc.
Features of Sole Proprietorship
Here are a few features that a sole proprietorship business would have. Have a look to find out if they align with the vision of your business.
Liability – The sole proprietor faces unlimited liability for the ups and downs of the business. The owner’s private assets are involved in the business and even in the case of debts and loans.
Company Continuation – the life of sole proprietorship business is at risk in case of the owner’s death, insolvency, imprisonment, etc. No individual other than the legal heir or beneficiary is allowed to become the predecessor because of the single ownership trait of the business.
Sole bearer of Profit & Loss – The owner is the only individual facing the consequences of the business be it profit or loss.
Decision-making – the sole proprietor is the only one in control. He is the only one making the decisions for all business activities
No Separation of Entities – There is no differentiation of the owner from the business as separate legal entities. The business and the owner of the business stand as one single entity.
Benefits of Sole Proprietorship
You must have thought about all the pros and cons of starting a business single-handedly. These advantages of sole proprietorship business will strengthen your decision, check them out :
Quick Decision making – Since the decisions are made by a single individual, there are no delays or complexities because of differences of opinion. The sole proprietor does not have to worry about considering anyone else’s opinions or disagreements while making decisions.
Intact Privacy – the confidentiality of the business remains intact as the sole proprietor does not legally require to share the information related to the business with any external party.
Sole profit owner – The sole proprietor is the only one who acquires all the profit and is not obligated to share any part of it with anyone.
Tax benefits – The Sole Proprietorship business has lesser compliance requirements. There are certain deductions that you can avail of to reduce the income tax liability as the sole proprietor. On top of that, income tax filing is mandatory only if the taxable income annually incurred is above a certain amount decided by the government.
Have You Made Your Sole Decision?
After knowing the benefits and features of a Sole Proprietorship Business, are you thinking of becoming a sole proprietor? It would require a minimum of approximately 10 days to get done with formalities if you contact Egniol Services today.
Egniol Services is here to provide you with all the necessary documentation and paperwork that you would require during the application process. We at Egniol provide 360-degree services for all your business needs. We are here to serve you from start to finish of the application process. Sole business owners contact Egniol Services to turn your business into a sole proprietorship entity without further delay.