Sole Proprietorship

01 About the Sole Proprietorship

A sole proprietorship is a business owned and run by one individual. The business and the owner are the same person in law and for tax.

It is the usual starting point for shops, traders, freelancers and small service businesses.

02 Benefits

• Simplest and cheapest to start: no incorporation, just the registrations the business needs (GST, Udyam, local licences) and a current account.
• The owner takes every decision and keeps all profits.
• Minimal compliance: business income is shown in the owner's own income-tax return.
• Individual slab rates can mean lower tax at modest income levels, and small businesses can use presumptive taxation within limits.
• Easy to close: the owner simply stops the business and cancels registrations.

03 Must understand before creating

• Unlimited liability: the owner's personal property is exposed to business debts and claims.
• No separate identity or continuity: the business effectively ends with the owner and cannot be handed over as a running entity easily.
• Partners or investors cannot be brought in without changing to another structure.
• Bank finance depends on the owner's personal credit and security.
• At higher incomes, slab rates of up to 30% plus surcharge can exceed what a company or LLP would pay.
• Banks ask for two documents in the business name to open a current account, so registrations should be in place first.

Usually needed to register: PAN and Aadhaar of the owner, address proof of the business place, and the registrations the business needs (for example GST or Udyam).

04 Send your requirement

Tell us about the business you plan to set up. Your details go to our office by email and we will get back to you.