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There are several differences, several advantages, and disadvantages in both forms of business. A sole proprietorship is very simple to form and does not require much paperwork to start with. But, a Company requires paperwork which has to be verified by a Professional (CA, CMA or CS) before filing with the Registrar of Companies. There are several stages, namely applying for Director Identification Number, Name Approval by Ministry of Corporate Affairs, the filing of various forms and finally applying for PAN and TAN once the company is incorporated.
There is no much compliance requirements for Sole Proprietorship business, but in the case of a Company, it should comply with statutory requirements like General Meetings and filing of annual returns,
If there is any loss, a sole proprietor is responsible totally. But in the case of a Company, the liability is limited. If you want to raise funds for your business, a Company is the best option as it will attract venture capitalists and investors. But a Sole Proprietorship can not raise funds.
You will need at least two persons (including yourself) to incorporate a company. In case, if you want to own the Company yourself, there is a new form of Company in India, One Person Company (OPC). OPC is operated by One Person as like a Sole Proprietorship and enjoys the advantages of a Limited Company.
One Person Company combines the advantages of Sole Proprietorship and Company. The disadvantage of a One Person Company is, it can not raise funds unless it is converted to a Private Limited Company.
To summarise, a Sole Proprietorship business is easy to start, no much paperwork and less expensive. In the case of a Private Limited, you need at least two persons to form a Company, there are strict compliance requirements and expensive. But, a company limits your liability for losses, easy to raise funds and a well-recognized form of business. OPC has advantages of both the forms of business (Sole Proprietorship and a Company), but it can not raise funds for the business. So consider the advantages and disadvantages of these forms of business and take a wise decision based on your requirements.
We, Spicy Law LLP wish you a successful business venture!
Please do not hesitate to contact info@spicylaw.com or call +91-9585776007 for further assistance.
The process is very simple and involves just three (3) steps.
Step 1: Affidavit
You need to sign an affidavit and get that notarized by a Notary Public / Commissioner of Oath. The affidavit must state that you are changing your name and you will be called as “YOUR NEW NAME”. The affidavit should also mention a reason for changing your name. (Name change after marriage to add spouse name as surname etc).Step 2: Newspaper Advertisements
You need to give two Newspaper advertisements. One in any English newspaper and another in your local language newspaper. (Tamil newspaper in Tamilnadu, Malayalam newspaper in Kerala etc). The format of advertisement can be as follows: I, Mr.OLD NAME have changed my name from OLD NAME to NEW NAMEby affidavit sworn before the Notary Public, at YOUR PLACE on DATE. Henceforth, I shall be known as NEW NAME for all purposes. YOUR NAME and ADDRESS.Step 3: Gazette Notification
You need to approach the Government press of your state and apply to have your name change notification published in the official Gazette of your state. Once this is published, your name change process is complete and you can start using your new name.For further information please feel free to contact info@spicylaw.com or call +91-9585776007.
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