Sole Proprietorship Registration in Chennai - An Overview
A Sole Proprietorship registration of a business organisation is where a business is managed by a single person. Generally, it does not require any registration as such. Any individual who wants to start a business with less investment can choose this type of business form.
A Sole Proprietorship is an unincorporated business that has just one owner who pays personal income tax on profits earned from the business. A sole proprietorship is the easiest type of business to establish or take apart, due to a lack of government regulation.
Benefits of Sole Proprietorship Registration in Chennai
Sole proprietorships have several benefits over other business entities. They are easy to form and the owners enjoy sole control of the business profits.
- Sole proprietorships are easy to establish
- You can protect the name of your sole proprietorship
- There’s no limit to the number of people you can hire
- You have complete control as the owner
- Sole proprietorships are often a stepping stone to incorporation
Who prefers the sole proprietorship?
- It do not have any complexities involved
- Owner is the sole earner of all the profits
- Control is not diluted and stays in one hand only
- Quick decision undertaking
- Personal touch and thus customer satisfaction
What are the Characteristics of Proprietorship ?
Ownership
As the sole proprietor, the business owner makes all business decisions. The owner controls and manages the proprietorship while creating and implementing changes. The sole proprietor may have several employees, but it is common for the sole proprietor to be the business’s only employee.
Unlimited Liability
As the sole owner of the business, the sole proprietor accepts complete responsibility for the business’s liabilities, as well as its income. The owner is financially responsible for the business’s debts, expenses and payables and creditors can garnish the sole proprietor’s personal income if the business falters or fails.As the sole owner of the business, the sole proprietor accepts complete responsibility for the business’s liabilities, as well as its income. The owner is financially responsible for the business’s debts, expenses and payables and creditors can garnish the sole proprietor’s personal income if the business falters or fails.
Risk
Since the sole proprietorship accepts all the risk, the proprietorship is often subject to less restrictive regulations than partnership and corporation entities. The sole proprietorship is not required to charter the business with the state, though the business may be required to register the business’s name and operations.
Easy Setup
Easy setup is one of the main characteristics of a sole proprietorship. Independent business entities, such as corporations and LLCs, must file business formation paperwork with a state agency before operating. Drafting the paperwork, filing it and receiving approval from the government can take weeks and cost Thousands of Rupees.
Easy Dissolution
Its dissolution is very simple because there are no legal restrictions required for its dissolutionand it can be dissolved at any time.
Management
By legal definition, a sole proprietorship can have only one owner. This characteristic means that the buck starts and stops with the owner. The sole proprietor does not have to answer to a board of directors or a business partner. There is no need to draft bylaws or a partnership agreement to control operations and management.
Flexibility
Sole proprietorship is very simple to change the nature of business according to change in market trends due to entire control and less resources. For example, a person who is doing the business of fast food may involve in the business of cloth at night.
Free from Legal Formalities
A sole trade business is not expected to meet any legal requirement. A sole trader may engage in any business unless license is required under law. Suppose, he wants to open a cloth shop or a grocery store, he will do it but if he wants to open a restaurant he will have to obtain a license before opening the same.
Secrecy
It is also an important characteristic of sole proprietorship. All the decisions are taken by the proprietor himself. He is in a position to keep his affairs to himself and maintain perfect secrecy in all matters.
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What are the Characteristics of Proprietorship ?
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Ownership
As the sole proprietor, the business owner makes all business decisions. The owner controls and manages the proprietorship while creating and implementing changes. The sole proprietor may have several employees, but it is common for the sole proprietor to be the business’s only employee.
Unlimited Liability
As the sole owner of the business, the sole proprietor accepts complete responsibility for the business’s liabilities, as well as its income. The owner is financially responsible for the business’s debts, expenses and payables and creditors can garnish the sole proprietor’s personal income if the business falters or fails.
Risk
Since the sole proprietorship accepts all the risk, the proprietorship is often subject to less restrictive regulations than partnership and corporation entities. The sole proprietorship is not required to charter the business with the state, though the business may be required to register the business’s name and operations.
Easy Setup
Easy setup is one of the main characteristics of a sole proprietorship. Independent business entities, such as corporations and LLCs, must file business formation paperwork with a state agency before operating. Drafting the paperwork, filing it and receiving approval from the government can take weeks and cost Thousands of Rupees.
Easy Dissolution
Its dissolution is very simple because there are no legal restrictions required for its dissolutionand it can be dissolved at any time.
How to Register a Sole Proprietorship Company in Chennai
How to Register a Sole Proprietorship Company in Chennai
The following listed are the steps involved in the process for registration of a Sole Proprietorship
Generally, there is no formal Government Approval or Registration is required to start a sole proprietorship business. Also, there is no online registration required and there is no specific procedure to fill up any form or submit any documents.
- Choose a Business or Trade Name and a location for doing business.
- You can go for any one of the below statutory registration:
- MSME registration
- GST Registration
- Professional tax registration
- Shops and Establishments registrationA Current account with any bank in the business or trading name and get started.
Documents required for Sole Proprietorship Registration in Chennai
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