Are you planning to start a new company? Are you in a spree of getting into Entrepreneurship? Wow, that is a great Idea. Now you have shifted your focus from 9 to 5 Job to building a new venture which might turn up as a legacy for your family. Proprietorship or Private Limited Company? Which one is the best suited for your business, let us discuss?
|Benefits of being an entrepreneur||Cons of being an entrepreneur|
|Flexible work time schedule||24/7 Working being a Solo Entrepreneur|
|Self-Esteem and proud||Need to connect with several Industry Expertise to run your business.|
|Improve the Earnings and Can have multiple earnings||Getting Investment for your Organization is the vital and pain point factor.|
|Creating Job Opportunities to others||Run out of the Earnings by paying salaries, office rentals and other expenses.|
|Creating a great Social Impact||Success is a long term one.|
|Developing the Economy of yourself and others.||You will not earn your money for your savings for a minimum of 2 years of time.|
What is a Proprietorship Company?
A Proprietorship company or A Sole Proprietorship is a One Person run company where the company and the Proprietor is no difference. A Company is same as the owner or Proprietor of the company. There is an Unlimited Liability on the Proprietor as the Proprietorship is the Company here.
- Registrations are quite easy for the Proprietorship Company.
- There is no difference between the owner and the business as there is no board of directors and shareholders for the company.
- Less Legal Compliances for Proprietorship company.
What is a Private Limited Company?
The Private Limited Company has several shares where the shares are controlled privately and not available to the public. The Shareholders will be managing the company and running the company. The Shareholders can also recruit directors who can run the company.
- The Liability is Limited for the Shareholders.
- The asset of the Shareholder is not acquired at any point for the debts/liability of the company.
- The Company is different from the Shareholder.
- The Private Limited Company has its own assets and liability.
- Private Limited company procedures are governed by the Companies act 2013.
- Company has lower tax burden and rates under the income tax act 1961.
|Proprietorship Company||Private Limited Company|
|Registration of the Business||The Company will be Registered under Shops and Establishment||The Company registered under companies Act 2013 with the Ministry of Corporate Affairs.|
|Name Selection||Name should be Selected which is Unique and Should not be same as the already registered business entity name. The Name will be same as Brand Name||Name should be Selected which is Unique and Should not be same as the already registered business entity name. The Company name ends with “Private Limited”|
|Separate Legal Entity||The Owner or Proprietor is same as the Company.||Separate legal entity under the companies acts 2013|
|Liability||Unlimited Liability||Minimum Liability as the Shares of the Company.|
|Number of Owners/Partners||One Owner||Minimum of 2 Share Holders required to register the Private Limited Company.|
|Transferability of Shares.||Shares are not Transferrable||Shares are Transferrable to others.|
|Taxation||Under Owner’s or Proprietors Income Tax||30% Tax|
|Legal Compliance||General Board Meetings has to be Conducted. Income Tax has to be Filed under Registrar of the company.||Income Tax Returns has to be Filed.|
|Existence||Independent of its members and directors||Based on the Owner.|
Thrive to be a Successful Entrepreneur, Connect with us for your Company Registrations.
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