A sole proprietorship is a convenient and simplified way to commence a business in India. In a sole proprietorship business there is no legal difference between the owner and the business.
A sole proprietorship is a type of enterprise in which business is owned and managed by an individual. In a sole proprietorship business there is no legal difference between the owner and the business. To put it in another way a sole proprietorship is not a legal entity. An owner is responsible for clearing off the debts of business. The sole proprietorship is a preferable and popular business form. It is simple and easy to form at nominal cost. A sole proprietorship is a convenient and simplified way to commence a business in India. It is neither considered as a corporation nor a company and the business is owned by a single person who is the owner/director/shareholder of the proposed entity. An individual who wishes to sell his/her own products or services can run their business as a sole proprietor and can enjoy the rights provided to a registered legal company. Most of the entrepreneurs find it as an ideal business entity and have registered their business under it. The loss or profit of the company is considered as the loss or profit of the individual and the income of the company is considered as the income of the owner as per the Income Tax Act. The owner signs the contracts in his or her own name because the sole proprietorship business has no separate identity under the eyes of the law. The owner of the proprietorship has customers who write cheques in the name of the owner. Sole proprietor owners use both their personal and business property/funds, which is not done in the case of partnership firm and company. These firms have bank accounts in the owner’s name. Sole proprietors need no formalities such as voting and conduction of meetings associated with the business. The sole proprietorship can file the lawsuits (and can be sued) in the name of the owner.
To start a sole proprietorship business, an individual who acts as a sole proprietor can invest his personal assets, other financial resources or can borrow money to commence the business activity.
A single person has the hold on the entire business and is the owner of the firm. Further, that person can transfer the ownership through a will or last testament as per his/her wish.
All the income generated or the loss or debt incurred by the company belongs to the owner, and he/she cannot share it with someone else.
This feature sometimes acts as a flaw. Since business and the owner are no separate identity, personal property of the owner can be used to pay the debts of the business.
With the ease of commencement, sole proprietorship comes with a few formalities before and after registration.
Control power is in the hands of a single person, and he/she is not answerable to anyone else. The person should be capable of using his skills, expertise, and intelligence to carry on business activities.
An OPC is great option for small entrepreneur to start their business by registering an OPC . An OPC can avail all the benefits provided to small scale industries such as easy funding without depositing security to certain limits, loans at lower interest rates, benefits under foreign trade policy, etc. These benefits play a crucial role in the progress of the company in its initial days.
The name should not resemble to any of the existing entities and shall not contain any offensive words detrimental to the interest of the society at large. Also, the name should necessary align with the objects of the company and must contain the word “OPC”.
A minimum number of 7 members are needed to run a Public Company, out of which 3 members should be the company’s directors. Relatives and Spouse can be directors or members. Maximum numbers of member can be unlimited and maximum director can be limited in Public Company.
To start a OPC, a minimum of Rs. 1 lacs is required as equity share capital.
The object of the Public Company shall be accordingly to business nature and as per the rule and act governed by Law. Any other object in its MOA shall be void.
Since the registration process is online, hence there is the requirement for Digital signatures of all the Directors and Shareholders.We provide seven DSCs in our package of Public Company Registration.
Once the name is finalized, the application shall be made in Form SPICE-Part A. The form is a replacement of earlier Form RUN and provides the option to apply for two names Prepare all requisite documents MOA, AOA, INC 9, INC 10, DIR 2 to be filed with the ROC. These must mention the main objective of incorporating a company.
Obtain an incorporation certificate with the corporate identification number (CIN). It usually takes 7-10 days to form a company..
The MOA is the constitution of the Company and defines various clauses mandatory to bring the company into existence such as Name clause, object clause, registered office clause, liability clause, subscription clause and capital clause.
The Ministry, after being satisfied, that the documents and details submitted in the application are correct and gives a true and fair view of the intentions of the applicant, shall grant the Certificate of Incorporation (COI) along with PAN and TAN.
Within 180 days of incorporation of the Company, a declaration, attested by the Director of the Company, shall be filed with ROC that each subscriber to the memorandum has consented to the share value taken by them.
Soon after the Public Limited comes to the existence, there shall be appointed before the first Annual General meeting of the Company, the statutory auditor who shall hold office till sixth AGM until and unless ratified or a resignation is served.
Like change in directors, change in address, increase in capital, etc. shall be done as on date basis.
