What is proprietorship or sole proprietorship and how to register it?
Proprietorship is also known as a sole proprietorship. It means ‘ownership of a person’. Only one person is a business/business owner. All the business-related work and control is in his hands.
Sole proprietorship aims at profit-making. The owner has to bear the loss in case of loss. He benefits when there is a profit. He arranges all his resources in a planned manner.
What is Proprietorship? and Its Registration Process
characteristics of Sole Proprietorship
Ownership in a sole proprietorship is unlimited. In the event of loss, he has to pay the borrowings by selling his personal property and assets.
Control over one’s business
In a sole proprietorship, the control is in the hands of the owner. Therefore, he takes all the decisions related to business.
A person’s capital
In a sole proprietorship, a single person invests capital in a business (business). He invests his accumulated money in the business. It also takes money (capital) from friends and relatives. He also takes loans from banks and other institutions when needed.
In a sole proprietorship business, only one person is the owner. Therefore, he has to bear the loss and profit. There is no other partner.
Secrets of trade alone
In a sole proprietorship business, only one person is the owner. He is the owner of all the assets associated with the business. Business can be terminated after the death of the owner or by his will.
Easy to setup
It is easy to establish a sole proprietorship business, as it is owned by a single person, so the legal formalities are also less. In starting a business with more than one partner, more legal formalities have to be met.
Advantages of Sole Proprietorship
Sole Proprietorship Business has the advantage that it provides self-employment. Also, it employs other people. Nowadays unemployment is a big issue in our country. In such a situation, all people should try to start a sole proprietorship business. It helps in removing unemployment and poverty in the country.
Close personal relationship
In this, the business owner maintains a close relationship with customers and employees, as he is directly in contact with everyone. By being in direct contact with customers, he gets direct information about their likes and dislikes, thereby improving his services and product.
Protects business privacy
In a sole proprietorship business, the owner makes all the plans. He keeps secret information like which future service or product to launch. Since there is no other partner in a sole proprietorship business, secrecy remains. Other competitors do not get this information.
Good control over the business
In a sole proprietorship business, the owner has control overall work. Creating and implementing new schemes – everywhere he gets the job done as per his wish.
Quick decision and appropriate action
In a single business, only one person is the owner (owner). There is no other partner. So there is no delay in taking decisions related to the business, it immediately gets spoiled.
Drives more profit
In a sole proprietorship business, both the owner has to bear the loss or gain. He gets all the benefits when there is a profit. There is no division in it. Therefore Swami works harder so that he can get more profit. He is automatically motivated to get more benefits.
Easy to install and finish
It takes less capital to start a sole proprietorship business. There are fewer legal formalities to initiate it. So it is easy to start and end. The owner can close his business at any time he wishes.
Disadvantages of Sole Proprietorship
Lack of management expertise
In a sole proprietorship business, only one person manages the management. Hence there is a lack of efficient management. In other businesses that have many partners, management is efficient.
In a sole proprietorship business, the business is limited to a limit. Therefore, there is not much benefit. On opening more than one branch or expanding the business, one owner is not able to do all the tasks properly.
Lack of continuity
Since the sole proprietorship is run by a single person, the business is shut down when his health deteriorates or he dies.
In a sole proprietorship business, only one person invests capital. Therefore it is not possible to invest a lot of capital. This capital is usually small and not sufficient for business.
How to register for Sole proprietorship
- Choose a business name (the name from which your business will be started) such as Haldiram Snacks Pvt LtdChoose a place to start a business.
- To get paid in the name of the business, you have to open a current account in the bank. Along with this, you have to show proof of your business so that the bank knows that your business is truly dynamic.
- You will have to get a PAN card for your business and also have to provide address proof (Pan card and ID for address proof of proprietor) For business address proof, you can also get an electricity bill or registered rental agreement in your name. can give.
- Documents such as registration of your industry, license, service tax registration, VAT / GST (registration documents confirming name and address of the business, shop establishment license, service tax registration, VAT / GST, etc.) will have to be given.
- You must also give a certificate given by CA (Chartered Accountant). (CA Certificate)