when a business is owned and administered by one individual it is known as a sole proprietorship firm or company.

This sort of business can be begun in 15 days and consequently makes it a standout amongst the most prevalent sorts of business to start in the unsystematic area, explicitly among vendors and little brokers. For a sole proprietorship business, enrollments are not required as they are recognized by alternate registrations, for example, GST registrations.

In any case, its risk is unlimited and it additionally doesn’t have a continuous presence.

Sole Proprietorships have minimum compliance as this firm is identified by its government and tax registrations. Therefore, the degree of its agreement is confined to the yearly filing of the service, sales or professional taxes.

Any sole proprietorship is simple to begin. One needs to simply have a GST Registration in place. Hence, the procedure is not complicated. Therefore, the sole proprietorship business can be set up in 15 days with the help of a PAN card for identity and proof of address.

When compared to an OPC or One Person Company, a Sole Proprietorship is economical due to its minimum compliance requisites. Even in the long-term perspective, it is still inexpensive.

It works out much cheaper because one would not need to hire an auditor. One of the main reasons why small merchants and traders choose it.

Factors regarding with proprietorship firm

1. Ownership: A sole proprietorship is owned and managed by a single person who invests their own capital to start and run the business. The proprietor has full authority to make decisions and control all aspects of the business.
2. Legal Entity: Unlike a partnership or a company, a proprietorship does not have a separate legal identity from its owner. Legally, the proprietor and the business are considered the same entity. This means that the proprietor is personally responsible for all debts, liabilities, and legal obligations incurred by the business.
3. Registration: While registration is not mandatory for a proprietorship firm, it is advisable to obtain the necessary licenses and permits required to operate the business legally. These may include local permits, business licenses, and tax registrations such as a Goods and Services Tax (GST) registration, depending on the nature of the business and local regulations.
4. Capital and Financing: The proprietor is solely responsible for providing the initial capital and funding the business operations. The proprietorship firm does not issue shares or have the option for external investors. However, the proprietor may choose to raise funds through personal savings, loans, or other sources of financing.
5. Taxation: In a proprietorship firm, the owner’s income and business income are considered the same for taxation purposes. The proprietor files their personal income tax return, including the business income, under their individual tax identification number (e.g., Social Security Number). The business profits are taxed at the proprietor’s individual tax rate.
6. Transfer of Ownership: Since the proprietorship firm is inseparable from the proprietor, the transfer of ownership is typically more straightforward compared to other business structures. The proprietor can sell or transfer the assets and liabilities of the business to another individual. However, the legal and contractual obligations associated with the transfer should be carefully considered and executed.