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Sole proprietorship is the simplest form of business ownership, where a single individual owns and runs a business. It is an attractive option for those who want complete control over their business and don't want to share profits or decision-making with others. As a sole proprietor, you can enjoy the benefits of low start-up costs, easy tax filing, and flexibility in decision-making.
Dive deep into the benefits and straightforward nature of running a sole proprietorship. While direct government applications are an option, SuperCA offers more than just registration. We provide a full spectrum of support services, from GST registration to tailored business advice, all designed to give your business the competitive edge it needs.
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Pricing Transparency: Starting your sole proprietorship is an exciting step, and we're here to support you with tailored packages starting at just ₹1500+GST. Direct applications are an option, but with SuperCA, you gain dedicated support, expert guidance, and a smooth path through the bureaucratic process, ensuring no detail is overlooked.
Feature | Sole Proprietorship | Limited Liability Partnership (LLP) | Private Limited Company |
---|---|---|---|
Definition | A simple, unregistered business structure owned and managed by a single individual. Ideal for small-scale operations and freelancers. | A corporate business structure combining the benefits of a partnership and a company with limited liability protection for its partners. | A separate legal entity with limited liability protection, owned by shareholders, suitable for businesses seeking growth, investment, and scalability. |
Ownership Structure | Sole ownership. Complete control and decision-making power rest with the proprietor. | Minimum 2 designated partners, with no upper limit. Partners can be individuals or corporate entities. | Minimum 2 shareholders and 2 directors, maximum of 200 shareholders. For an One Person Company (OPC): 1 director and 1 nominee. |
Registration Time | No specific registration required. Business can be started with basic licenses like GST and MSME registrations. | Typically takes 7-9 working days for incorporation, subject to document submission and verification. | Generally takes 10-15 working days for registration. OPCs can be registered faster under simplified procedures. |
Liability | Unlimited personal liability. The proprietor’s personal assets are at risk in case of business liabilities. | Limited liability to the extent of the partners’ capital contribution. Personal assets are protected from business debts. | Limited liability to the value of shares held. Shareholders’ personal assets are not at risk, making it a preferred choice for risk mitigation. |
Compliance Requirements | Minimal compliance: Income tax filing only if turnover exceeds ₹2.5 lakhs. No mandatory annual filings. | Moderate compliance: Annual filing of Form 11, Form 8, and ITR 5 with the Registrar of Companies (ROC). | High compliance: Annual ROC filings, board meetings, AGMs, audit requirements, and ITR 6. Directors must comply with statutory obligations. |
Taxation | Business income is taxed as personal income under the proprietor’s name. Simple tax structure with no separate business tax filings. | LLPs are taxed at a flat rate of 30%, plus surcharge and cess. No dividend distribution tax, making it tax-efficient. | Taxed at 22% for domestic companies without exemptions. Additional surcharge and cess may apply. Dividend distribution tax applicable on shareholder dividends. |
Perpetual Existence | No, the business is dependent on the proprietor’s life. It ceases to exist upon the proprietor’s death or incapacitation. | Yes, the LLP exists independent of partners. It can continue despite changes in partnership or ownership. | Yes, the company has perpetual succession. Ownership transfer does not affect business continuity. Suitable for long-term business stability. |
Cost of Formation | Low cost, involves only basic registrations like PAN, GST, and MSME. No formal incorporation fees. | Moderate cost due to LLP agreement, incorporation fees, and compliance filings. | High cost due to incorporation fees, professional charges, and ongoing compliance costs. Suitable for businesses looking for long-term scalability. |
Transferability of Ownership | Non-transferable. The business cannot be sold or transferred easily due to lack of separate legal identity. | Transferable. Partners can be added or removed, and partnership interest can be transferred with consent. | Easily transferable. Shares can be sold or transferred to new shareholders, making it suitable for raising capital and expanding ownership. |
Documentation Needed | - PAN Card - Aadhaar Card - GST Registration (if applicable) - Bank Account |
- LLP Agreement - Partners’ Consent - PAN & Aadhaar of Partners - LLP Incorporation Certificate |
- Memorandum of Association (MOA) - Articles of Association (AOA) - Incorporation Certificate - Shareholders’ and Directors’ KYC Documents |
Sole Proprietorship: Ideal for individuals looking to start a small business with minimal compliance. Best for sole traders, freelancers, and consultants.
LLP: Suitable for businesses looking for a flexible structure with limited liability. Preferred by professional service firms and small businesses.
Private Limited Company: Best for businesses planning to scale, raise funds, or establish a corporate identity. Offers strong legal protection and is attractive to investors.
Choosing the right business structure depends on your business goals, risk appetite, and compliance capabilities. Each structure has its unique advantages and disadvantages, so evaluate carefully before making a decision. For detailed guidance on selecting the best structure for your business, consult with a legal or business expert.
Ready to register your business? Contact Super CA for end-to-end support in setting up your Sole Proprietorship, LLP, or Private Limited Company.
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Sole proprietorship business does not need any specific registration. However, the owner is advised to get a few essential registrations to make the business function in a better way like registration in Shop and Establishment Act, a GST registration or a Udyog Aadhaar under MSME
We know the fact that registration in this field is not a cup of tea as the information is always scattered across different sites. Super CA is always here to assist you. Our team comprises legal experts, advisors, professional CAs and CSs who are always there with you in every course of action. We guarantee a hassle-free quick & easy process with 100% accuracy in documents at minimum possible cost.
Please note, SuperCA operates independently, offering simplified assistance for your sole proprietorship registration. While we're experts at what we do, it's important to note we're not directly affiliated with any government agencies. Our mission is to streamline the process, making it hassle-free for you. Information provided is for general purposes only and not professional advice. Consult our qualified professionals for personalized guidance.