A Sole Proprietorship Firm
When the business is owned and controlled exclusively by a single person. it is called sole-proprietorship, It is started through the initiative of the proprietor and is run with the capital provided by him or through borrowed funds. The proprietor manages the business himself, bears all the risk alone and gets all the profits. In this type of firm, the proprietor can apply for the pan card in his name or in the name of the firm. There is no restriction on the name of the pan card. He is free to choose any line of business and take any action with the some legal formalities, as applicable.
is the oldest and the most common form of business. It is a one-man organisation where a single individual owns, manages and controls the business.
Hence, this form of organisation is suitable for the businesses which involve moderate risk, small financial resources, capital requirement is small and risk involvement is not heavy.
Even though registration is not essential, the owner has to obtain the necessary licenses specific to his/her line of business such as Shops & Establishments, Professional Tax, Service Tax, VAT, IEC, etc. A sole proprietorship can be registered under the MSME Act to avail the benefits and protection under that act.
Technically, no registration is required to start a business under sole proprietorship. However, to open a bank account in the name of the firm, a minimum of 2 registrations such as Shops & Establishments, Professional Tax, Service Tax, MSME, etc. under the local, state or central authority is mandatory to comply with the Know Your Customer (KYC) norms of the bank.