A Sole Proprietorship is a business entity with no legality. It has no governing body and it doesn’t offer the perk of limited liability. However, entrepreneurs of all scales still continue to choose that as their business infrastructure. What is the reason? Let’s find out.
Choosing the right business entity is the most important decision for any entrepreneur. Not only it set the initial infrastructure of the enterprise, but it also sets the direction of the business trajectory. It is, therefore, surprising when you consider that many small and large-scale businessmen choose sole proprietorship registration. Not only there are other, and better options at their disposal, but unlike these business organizations, a sole proprietorship isn’t even a legal entity.
So why do entrepreneurs keep chasing this ancient infrastructure to start their business?
The reason lie in its benefits. There are many Sole Proprietorship Registration benefits that those with legal entities ignore. Let’s dive into those benefits so that when it is time to choose your business entity, you have another option.
Proprietorship firm Registration is easy
Perhaps, one of the biggest benefits of choosing a proprietorship firm is how easy it is to set up. As it’s not a business entity, you don’t need to go to an office and get some kind of registration certificate. All you need are two things: Udyog Aadhar Certificate and GST registrations. You can obtain them sitting comfortably at home using online methods.
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It is easy to operate this Non-Legal Business entity
As one person is running this show in a Sole Proprietorship firm, it is easy to operate. Only one person has to make all the decisions without taking into account a plethora of other opinions. There is no concept of a board meeting in this company and thus, you can make any business choice without others weighing you down.
You become a sole beneficiary of all the profits
The operative word in a sole proprietorship firm is “solo”. As a solo entrepreneur, you get to keep every profit that your firm earns. Furthermore, how you use those profits will also be up to you. Whether you spend it judiciously to move your business further or expend it stupendously on luxuries, all decisions fall on you.
Low taxation and compliance requirements
Since a sole proprietorship is far cry from a business entity, it’s also not a slave to the compliance and taxation requirements of a business entity. The only compliance requirement that you need to fulfill to legitimize your business is filing your Income Tax Returns.
Privacy of doing business
There is no digital record of your finances other than your ITRs and GST returns. It gives you some form of privacy to conduct your business operations more flexibly. While there are legal implications of not having to inform the higher-ups about your finances, having no financial record will let you grow your business inside a protective bubble.
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Conclusion
A sole proprietorship firm is an unregistered business entity with no compliance requirements and no restrictions. Those reasons have contributed to it being India’s most preferred business entity. All of them can help you establish your business easily and give you a way to achieve market growth like never before. But beware, having more freedom isn’t akin to having the right to do whatever you want. Thus, if you want to establish a sole proprietorship, do so only after you have consulted with our experts.
