Key Features of Partnership Firm
- Lack of Resources.
- Unlimited Liability.
- Lack of Credibility.
- Can not raise funds easily.
- Can not add Partners.
Disadvantages of Partnership Firm
- Person Required as Single Entrepreneur.
- Single Owner of the Business.
- Easy to Start and Easy to Close.
- Complete Control.
- Lower Cost of Formation and Compliance.
- Any Indian citizen with a current account in the name of their business can start a sole proprietorship. Registration may or may not be required, depending on what business you are planning to establish.
- But to open a current account, banks typically require a Shops & Establishments Registration.
To start a sole proprietorship, you would need
- Address and identity proofs,
- PAN card,
- All KYC documents and
- Rental agreement or sale deed (in case of Shops & Establishment Act Registration).
You can do this if you want. The procedure for this conversion is a little tedious, but it is possible. It is very common for sole proprietors to convert into partnerships and private limited companies at a later stage.
Compare and Select
Ease of accomodating Investment
Private Limited Company
Startups and growig companies
Limited Liability Partnership
Professional services firms
Possible, but unlikely
One Person Company
Possible, but serverely unlikely
Small traders and manufacturers