Can a proprietor have more than one business establishment? Which law governs sole proprietor business?<\/p>\n
There is not a restriction to have more than one business by a proprietor. One can have more than one trade name. It is like a company selling products or providing services under different tradename or trademarks. <\/p>\n <\/p>\n \t\t\t\n\t\t<\/div>\n
First, we should understand the legal process to have a proprietor business establishment. There is no starting point to have a proprietor concern. An individual can start it any time after attaining the age of majority without any formality\u2014this age governed by the law of contract \u2013 Indian Contract Act, 1972.
In the case of the proprietor, his business has no different legal entity from him. For the proprietor business establishment, the legal name of the individual shall always be the legal name of the business.
The proprietor shall be responsible for all liabilities without limit, including all tax liabilities \u2013 direct or indirect. Permanent Account Number of the proprietor shall be the PAN for all his businesses. The GST number is always based on the same PAN.
The question may arise about tradename. How many tradenames may a proprietor have? A general reply shall be \u2013 no limit. However practically, it may not be the case.
Under the thumb rule of GST, one person can have one tradename for a GST registration. Under a GST registration, a person can have many products and services.
A proprietor shall have separate GST registration under different states where he has a business establishment. For each GST registration, one can have other trade name and diverse set of products and services mix. Usually, such vast business is not manageable for a single person. The proprietor shall share his time, money, resources, Identity documents, property (shops\/office) and employees with each such business. There shall be different accounting for each trade name for GST purpose and consolidation for Income Tax.
What may be a better alternative?
One may have different trademark and brands for products and services. The size of the business should be best suited to the scale of business operations. If the size increases, one should opt for a one-person company, partnership, limited liability partnership, private company or public company.<\/p>\nBe first among your friends to share this post<\/h3>\n<\/div>\n<\/div>\n
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