The Basic Differences Between Proprietorship Firm vs Private Limited Company

08 Jun The Basic Differences Between Proprietorship Firm vs Private Limited Company

One of the most daunting challenges faced by new start-ups is to identify a perfect business structure. If you want to avail higher ROI or avert tax liabilities, you must have sufficient knowledge about the different business structures to gain those benefits. Company Registration in Dwarka helps in all professional services at the best prices.

Here in this blog, you will understand the concept related to the Proprietorship Firm Vs the Private Limited Company.

1. Proprietorship Firm is known as an unincorporated entity that runs and is owned by a single individual without creating a separate legal entity from its owner. Whereas Private Limited is to be registered under the Companies Act 2013 with the Ministry of Corporate Affairs.

2. In a proprietorship firm, there is no need for approval before using the name. However, Private Limited Company me be approved b the Registrar of the company and will end with the words Private Limited Company.

3. In a sole proprietorship there is no separate legal identity, therefore the owner has unlimited liability. The owner is alone liable to hold legal responsibility for any debts and losses that the business may incur. Conversely, in a private limited company, the shareholder’s liability is limited to his investment in the business.

4. If potential business owners are seeking minimal filing requirements, then sole proprietorship is the way to go. For this purpose, you don’t have to audit accounts or file returns annually as your tax will only be assessed in the owner’s tax return. Whereas, the owners of private limited companies don’t have the same fate and have more requirements to comply with under the Singapore Companies Act. Company Registration Consultants in Dwarka Sector 23 help with notices and refunds post-tax filing.

5. The sole proprietorship firm has lower public perceptions, which may lead to difficulties in acquiring bank loans and other forms of financial support or funding.

However, the private companies obtaining funding through bank loans or from external investors is generally much easier as it is legally seen as a corporate body, which makes them appear more credible in the corporate world.

Company Registration in Dwarka Mor offers hassle-free company registration at affordable prices with no hidden charges. Stop worrying no need to wait and get your business registration & firm registration today. Come and visit  Tax On Track Solutions and start your business.