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In a proprietorship firm structure, there is no difference between owner and the business. Owner controls everything directly in the business and has the unlimited responsibility for all losses and debt.
It is less complicated way to start a business. There is no such registration with Government in proprietorship structure. There is separate PAN card required in the name of business. The income tax return and the payment of taxes is done by proprietor only. A proprietor can have a separate trade name for the business.
You can start proprietorship by either registering for GST or applying for MSME.
you want to avail the benefits of MSME- You go for both.
It's a simple single person firm. it’s a best way to start a business in India with the less costing and less compliance. one person can go for the legal registration.
a) Costing : As compared to other forms of incorporation it is the most cost effective.
b) Compliance : You have to just file the income tax return as individual at the end of year nearby in July. You have to maintain basic invoices of income and expenses of the firm.
c) Less Income Tax :- Advantage of individual slab available for your business.
a) Unlimited Liability: -In the firm you have unlimited business liability. Example, if you take the loan from bank on firm name or if you liable to pay any liability to creditors then bank or creditor can claim your personal assets also legally to repay the debt.
b) Can’t include the partners:-Sole Proprietorship firm can’t include the partners in future.
c) Issues in raising the funds :-You can’t raise the funds from Angel Investor or VC Firms like selling your equity or share to another person and raise the money from that person.
d) Registered Legal Existence:-There is no proper registration with the government so it may not be recognized unlike a private limited company.
e) FDI is not possible in proprietorship firm, Only an Indian resident can become proprietor.