Sole Proprietorship Firm
What is sole proprietorship?
A sole proprietorship is a business that is owned and managed by a single person. You could have one up and running within 15 days, which makes it very popular among the unorganized sector, particularly small traders and merchants. There is no such thing as registration; proprietorships are recognized by other registrations, such as GST. As you would imagine with a business that’s so easy to set up, though, its shortcomings are severe: the liability of the proprietor is unlimited and it does not have a continuous existence.
Advantages of a Proprietorship:
Sole Proprietorships are only recognized via their government and tax registrations, so the extent of their compliance is limited to the annual filing of their service, professional or sales taxes.
Easy to start
A sole proprietorship could take only 3-4 days to start because all you need is a GST registration. Either way, the process is uncomplicated. PAN card and identity and address proofs are enough to get them done.
A Sole Proprietorship is inexpensive as compared to a One-person Company (OPC) and, thanks to the minimal compliance requirements, is inexpensive even over the long-term. You would not need to hire an auditor, for example. This is why, despite its severe shortcoming (unlimited liability), small merchants and traders opt for it.