Sole Proprietorship Business
If you want to quickly start a business without facing the hassles of long registration process, compliances and procedures, start as a Sole Proprietor. Sole Proprietorship is a type of an enterprise owned and run by a natural person. In this type of business, there is no distinction between you and your business. Your liabilities are unlimited and you are responsible to pay off your loans from your personal savings, in case you are unable to make profits to pay your interest or repay your loans. Mostly this type of business gets classified as small and medium enterprise and will be governed by the Micro, Small and Medium Enterprises Development Act, 2006
You may use a trade name or business name other than your name. Registration of Udyog Aadhar or MSME can be done for Sole Proprietorship although it is not mandatory.
Here are the Advantages and Limitations of Sole Proprietorships.
Advantages of Sole Proprietorship Business
You will be able to take your own decision without the influence of a third person
You will have very less compliance be to made when compared to partnerships or companies
It is easy to start a sole proprietorship business
Involves less paperwor
Limitations of Sole Proprietorship Business
The initial startup costs have to be borne by entirely by you.
You will be solely responsible for your failures
There is a generally a lack of reliability for sole proprietorships.
Despite the existence of these limitations, Sole Proprietorship is the most sought after business form for micro and small business. So what are you waiting for? If you have a business idea, start a sole proprietorship right away by getting the following documents ready.
Check out other related topics
Sole Proprietorship - Borrowing loans from NRI.
Micro Small and Medium Enterprises