formation of sole propritorship
sneha
(Querist) 21 March 2010
This query is : Resolved
dear expert,
My friend want to start a business as a sole proprietorship for construction related machinery and construction contracts. i have gone through companies act but not got satisfied details.
My questions are :
1. Whether he will need to register his companies name under ROC.
2. Whether he will need to follow companies acts rules
3. Whether he will need to show enough capital on his companies name
Parveen Kr. Aggarwal
(Expert) 21 March 2010
In case your friend wants to run his business as 'sole proprietorship' then there is no need for registration under the Companies Act.
In case he has not to run business by forming a company, he need not follow the Companies Act and Rules.
For his business, the proprietor will require adequate capital.
sneha
(Querist) 21 March 2010
what else he will have to comply with.
How he can form his firm, what are the steps
Parveen Kr. Aggarwal
(Expert) 21 March 2010
Business can be run either under a sole proprietorship concern or a partnership firm or a company incorporated under the Companies Act (private limited or a public limited company) or under any other form.
In case your friend intends to run his business under sole proprietorship concern, he need to form a firm or a company. Sole proprietorship as such is not registered in any office. However, it needs to be registered under different legislations like Sales Tax or VAT Act, Income Tax Act, Labour Laws etc.
Kumar Thadhani
(Expert) 23 March 2010
Yes Sir,Your friend to start business it is better faster and inexpensive formation as sole proprietorship.Formation of private limited company takes alittle time and it is expensive way of formation of business and with adequate working capital is required . .
