April 22, 2017 by Tejaswi Kumar Singh
Sole Proprietorship is not that reliable form of business, Due to lack of Limited Liability clause. Proprietor always hassle to take risk as the creditors has right to recover their money from his property
Private Limited is a concrete form of business which gives the confidence to the directors of the company to take risk, as Companies Act 2013 contains a Limited Liability clause. A Private Limited Company has legal protection for their name all around the Globe.
Particulars |
Private Limited Company |
Sole Proprietorship |
Compliance Clause |
Private Limited Company needs to follow legal obligation which are required by MCA & ROC. Compulsory Auditing, ROC filings, General Meetings, etc | Sole Proprietorship needs to file a tax return of those laws in which they are registered.This is the only Mandatory Compliance |
Tax Clause |
Private Limited Company has to pay flat 30% on the Net Total Income. | Sole Proprietorship avails the income slabs rates which are applicable in the case of an Individual. |
Growth Factor |
Private Limited Company can grow faster due to the facts:
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Sole Proprietorships grow at slow pace:
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Name Clause |
Once the Name is Registered cannot be taken by anyone | No such immunity as Private Limited Company |
Fundings |
People can invest their money and become the shareholder(owner) of the company | Everybody prefers to invest their money and become the owners rather than lend it to somebody |