A sole proprietorship firm means a type of business entity that is owned, controlled and managed by a single person. The owner of the Business is called Sole Proprietor of the Firm. As the business is run by a natural person, there is no legal difference between the promoter and the business. The promoter himself receives all the profits. Sole Proprietorship firm does not require any formal registration.
The key feature of sole proprietorship firm is that it is very easy to start as there are less legal formalities and lesser formation costs involved.
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Control over all business decisions remains in the hands of the owner. This ensures quicker business decision making and hence, faster execution. Owners have complete and direct control over all decision making.
The registration process for starting a sole proprietorship firm is very easy compared to other business structures. One can get Registration Certificate within 1 working day. Obtaining a GST registration is also very quick and easy.
The dissolution or sale of the Proprietorship firm is very easy. As there is no legal distinction between the proprietor and the proprietorship firm, not much regulatory formalities are required for closing of a proprietorship.
The owner of a sole proprietorship is not required to file a separate business tax report. The business will be taxed at the rates applied to personal income, and not corporate tax rates. This means huge tax savings.
The owner of Proprietorship firm, himself is self-employed and this creates various employment opportunities. Also because the owner is in the hands of a single person, there are fewer chances of leakage of business secrets.
A Sole Proprietorship registration is inexpensive as compared to all other forms of organizations. Also on account of the minimum compliance requirements, it proves to be an advantage as it is inexpensive even in long run also.
