In a Sole Proprietorship, no separate legal entity is created. A single owner with maximum liabilities manages the business. Preferred by small business owners, it is the most accessible type of incorporation one can opt for. However, some activities, such as those related to banking, insurance, finance, lending, defence, and telecommunication, call for specialised authorisation. A firm must, by law, get various government approvals in such circumstances. Hence, the proprietorship business structure only works for business activities that are small-scale in nature.
Either as an individual or a firm, sole proprietorship registration requires the below-mentioned set of documents.
Following is the procedure for incorporating a sole proprietorship firm-
Following compliances are applicable for a sole proprietorship:
In addition to the above, various other compliance requirements may apply to the proprietorship based on industry and location.
Since Proprietorship doesn’t involve any compulsory legal registration, the dissolution of such a firm is relatively easy.