Hindu Undivided Family (‘HUF’) is dealt with as a ‘man’ under area 2(31) of the Income-impose Act, 1961 (in this after alluded to as ‘the Act’). HUF is a different substance with the end goal of evaluation under the Act.
Sole Proprietorship Firm Registration Services in Purnea
Avyud Consultancy is a well-known business platform and a progressive concept, helping clients in Purnea, Bihar with end-to-end incorporation, compliance, advisory, and management consultancy services. Incorporating a Proprietorship Firm with Avyud Consultancy is easy, seamless, cheap, and fast. Apart from being a Proprietorship firm, Avyud Consultancy helps entrepreneurs easily with Private Limited Company Registration, Public Limited Company Registration, Partnership Registration, HUF, One Person Company, and LLP Registration.
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Advantages of a Sole Proprietorship
- A sole proprietorship is the most straightforward type of business to set up. In the event that you work your business under your own particular name, without any increments, you don’t have to enlist your business name to begin working as a sole proprietor. This makes the sole proprietorship perfect for the business new businesses, independently employed temporary workers, and low maintenance and locally situated organizations.
- As a sole proprietor you own 100% of the business and get to make all the decisions. Unlike corporations, sole proprietors are not required to hold shareholders meetings or take votes on management issues.
- Sole proprietorships are much simpler to operate from a tax and accounting perspective. As a sole proprietor you do not need to file a separate business tax return – all income generated from the business is reported on the personal tax form. See Reporting Business Income or Loss on Form 1040 for how to report income from a sole proprietorship in the U.S., or How to Complete Your T1 Income Tax Form for Canadian sole proprietors.
- As with other forms of business, as a sole proprietor your expenses related to the cost of doing business are fully deductible from income tax, as are travel expenses, automobile expenses, advertising, and a portion of your home expenses if you are operating a home-based business.
- Business losses can be deducted against other forms of income or carried forward or backward, so a sole proprietorship that loses money in the early years can deduct the losses against personal income, making it ideal for those wishing to transition from employee to self-employed over a period of time.
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The Sole Proprietorship Is Most Common Form of Small Business Ownership
A sole proprietorship is an unincorporated business owned by one individual, making it the simplest form of business to start and operate. There are over 20 million sole proprietorship operating in the United States and Canada, making it by far the most popular form of business ownership.
The key feature of the sole proprietorship definition is that unlike an incorporated business or a partnership there is no legal separation between the business and the owner in a sole proprietorship – the business is considered to be an extension of the owner and as such the owner is personally responsible for any debts or liabilities incurred by the business.
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FAQs for Sole Proprietorship Firm Registration Services
What is a Proprietorship?
A Proprietorship / Sole Trading Firm is a business that is owned and operated by one person. The owner and the business are considered one and the same. The proprietor is personally liable for all business debts i.e. his personal assets can also be used to repay business debts.
The proprietorships are not regulated by any particular act, so there is no registration. Every business requires registration under the Shops and Establishment Act whether it is providing service or dealing in goods. Other registrations like GST etc depend on the nature of the product/service.
Who Can Start a Sole Proprietorship?
Any Indian citizen who has a current account in the name of his business can start a sole proprietorship. Registration may or may not be required, depending on the type of business that is planned to be set up. However, to open a current account, banks usually require a shop and establishment registration.
What are The Compliances Required?
As a sole proprietor, you must file an income tax return annually. Also, if you are registered under GST then you need to file your GST return. A sole proprietor must also deduct TDS and file a TDS return if it is liable to tax audit.
What is GST and GSTIN?
The Goods and Services Tax (GST) is a comprehensive tax levied on manufacturing, trading, and services across India. GST has replaced most of the indirect taxes like VAT, Service Tax, Excise Duty, etc., levied by the Center and the State from 1st July 2017. Goods and Services Tax Identification Number (GSTIN) is a 15-digit state-wise PAN-based number used for identification. Business registered under GST. Click here to know your GSTIN.
Who is a Sole Proprietor?
The owner of a sole proprietorship business in India is called a proprietor. It cannot be a corporate or legal entity. Proprietorship and proprietorship are legally considered to be the same entity.
The owner’s PAN and other documents are the basis for obtaining all other business registrations and licences. In case of any issue of liability in the business, the owner is held personally liable for the same.
What Benefits of Proprietorship Formation?
Ease of setup: Entrepreneurs can start operations and get payment from customers as no registration is required to start proprietorship.
Ease of Compliance: Another advantage of a proprietorship is that in most cases it does not require any additional compliance. The PAN of the proprietor and the proprietorship is the same. So in most cases, an only income tax return has to be filed in Form ITR-3 every year.
Ease of Dissolution: The owner does not have to specifically wind up the company if he wants to cease operations. This saves a lot of time and effort.
