Proprietorship is the oldest form of business ownership in India. In a proprietorship, the enterprise is owned and controlled by one person. He is master of his show. He sows, reaps, and harvests the output of this effort. He manages the business on his own. If necessary, he may take the help of his family members, relatives and employ some employees.
The sole proprietorship is a popular business form due to its simplicity, ease of setup, and nominal cost. A sole proprietor need only register his or her name and secure local licenses, and the sole proprietor is ready for business. A distinct disadvantage, however, is that the owner of a sole proprietorship remains personally liable for all the business’s debts. Here in this article, we will understand the features of Proprietorship Registration.
Features of Proprietorship Registration
- Unlimited Liability
Since there is no separation between the owner and the business, the liability of the owner is also unlimited. So if the business is unable to meet its own liabilities, it will fall upon the proprietor to pay them.
- Single Ownership
A sole trading concern is owned by one individual. It is run entirely at his risk of loss. The sole trader provides both capital and management to the business.
- Personal Organization or Common Identity
A sole proprietorship has no separate legal entity independent of the owner. The owner and the business concern are one and the same. The owner owns everything the business owns and he owes everything the business owns.
In a Sole Proprietorship, the capital is employed by the owner himself from his personal resources. He may also borrow money from his friends and relatives if he cannot depend solely on his personal resources.
A sole proprietorship is entirely dependent on its owner. The death, retirement, bankruptcy. insanity, imprisonment, etc will have an effect on the sole proprietorship. In most of such cases, the proprietorship will cease to exist and the business will come to an end.
- Dissolution of the business
A sole proprietorship business can be dissolved at the owner’s will or by court order if it is found out that the business is engaged in the illegal practice.
Here in this article, we have understood the features of a Sole proprietorship in India, which are useful to grow your business. If you’re wondering for Sole proprietorship company incorporation then you should visit Online Sole proprietorship registration portal.
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