A Sole Proprietorship firm can function under the name of the owner or under an artificial name. There is no law that regulates the guidelines of Sole Proprietorship Firms in India. There is no separate PAN card for a Sole Proprietorship Firm as the PAN number of the Proprietor shall be used as PAN number of the firm.
It is quite famous among the businessmen owing to its simplicity, ease of setup, and the low capital costs. The owner of the sole proprietorship firm signs the documents of the firm under his own name because, as per the law, the sole proprietorship has no separate identity. Hence, all the liabilities of the firm are basically the liabilities of the individual. It is an economical way to start a business if you are not sure about the success of the business because the winding-up process is quite easy. Its formation is easy, and the compliance is very less.
The benefits of sole proprietorship firm are mentioned as follows:
- Self-attested copy of PAN card and Aadhar card
- One softcopy of the Proprietor's Photograph
- No Objection Certificate from the Property owners
- Rent Agreement and Latest Electricity Bill
Draft a Simple Agreement even though that's not mandatory at all, but it's better to have the byelaws.
Apply for GST registration and Shop & Establishment Act Registration.
Open a current account, and then you can start the business.
PAN number of the Sole Proprietorship Firm shall be the PAN number of Proprietor in all the circumstances and therefore Sole Proprietorship does not have the separate legal entity status.
There is no as such portal or law governing the Sole Proprietorship firms in India.
Yes, a Sole proprietorship firm can be easily converted into a Private Limited Company.
A Sole Proprietorship Firm needs to do GST, Income Tax, PF, ESI and other allied laws compliances in India subject to its applicability to the firm as per law.
So, the business which is into the idea stage or the business which wants to work on a traditional mode with least cost and compliance requirements generally prefers the proprietorship firm.
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