How can we raise funds for a proprietorship firm?
LegalWizin (Online Legal Service) 15 June 2021
Sources of fund raising can be internal or external. Whereas there is no restriction on raising funds from internal source, a proprietorship firm can approach limited external resources.
Raising funds from personal funds or bringing in funds from relatives or friends can be an option as internal funding. The proprietor can alternatively avail loans from banks and financial institutions or the scheme (if any) declared by the Government.
However, the proprietor cannot raise funds from public issuing shares or other securities. Angel or Venture Capital funding may be difficult in case of sole proprietorship firm due to certain limitations like equity funding and credibility, etc.
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Dr J C Vashista (Advocate) 16 June 2021
No legal issue /problem / dispute is involved in the query for consideration and obligation of experts on this platform.
Consult some financier
Sankaranarayanan (Advocate) 16 June 2021
as suggested it is not legal issues, so better to consult a fund management consultant or chartered accountant.
G.L.N. Prasad (Retired employee.) 16 June 2021
The advertisement was in the guise of the query. Every sole proprietor can raise any loan through Bank or relatives or by private lenders by offering security. The presumption is that a sole proprietor is a small start-up for livelihood, and he may not have the capacity and expertise to use Legalwiz for availing of finance. After mobilizing the initial capital only an entrepreneur goes for a business.
Sudesh Kumari (Advocate) 16 June 2021
A sole proprietor can raise funds both from internal or external sources. It can bring in personal funds or borrow from relatives or can take loans from financial institutions. It cannot raise funds from public.
T. Kalaiselvan, Advocate (Advocate) 18 June 2021
The Sole proprietor and partnership have limited avenues for raising capital.
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juststart (Legal Services) 23 August 2023
Funds can be acquired through internal or external means. While internal sources do not impose any restrictions, a sole proprietorship firm has limited options for external funding. Internal funding includes utilizing personal funds, obtaining contributions from relatives or friends. An alternative is for the proprietor to secure loans from banks, financial institutions, or government-backed schemes if available.
However, the proprietor is not permitted to generate funds from the public through share issuance or other securities. Obtaining Angel or Venture Capital funding might pose challenges for a sole proprietorship due to constraints such as equity funding limitations and credibility considerations. If you require expert assistance with legal matters, feel free to reach out to the specialists at Juststart.co.in for complimentary consultation.