The term proprietorship firm registration is often used all over the world. The main difference between a proprietorship firm and other types of firms is that proprietors are the owners and directors of a company, rather than investors or partners.
Individual proprietorship firm registration
A proprietorship firm typically has no more than one owner, with the exception of partnerships, which can have multiple owners but still be considered to be a single legal entity. This is because proprietorship firms do not hold a separate legal status from their owners, but in most circumstances, the owner or owners must register a business name and trading name.
Advantages of proprietorship firm registration
Another advantage to a proprietorship firm registration online is that it is easy to set up and manage. For example, they do not need to file consolidated financial statements or annual tax returns. They are, however, required to file an annual Business Activity Statement (BAS) and they must also lodge an Australian Business Number (ABN). This can be achieve over the internet in almost all instances. To incorporate, a person usually needs to act through an expert Business Advisor. These advisors will take care of the whole process and provide advice before, during, and after the incorporation of the company. Australian law (prior to July 2016) required that all proprietorship firms display their ABN at the entrance of their business premises.
Establishment involves the partners
Brick and mortar proprietorship firms may be establish in a number of ways. The most common scenario involves a single proprietor setting up a sole trader with the legal title of Owner – Company (or ‘the Commonwealth’). This means that the company is own by the individual who established it and that there are usually no employees, creditors, or shareholders other than the owner. Another scenario involves the establishment of a partnership firm, where two or more people own an equal share in the company in which they work. Proprietorship firms must also have a tax file number (TFN), which is similar to the ABN but differs in that it does not allow a proprietorship firm to claim input tax credits, nor does it allow them to withhold income tax from payments of remuneration.
A proprietorship firm is a business that is own and run by one individual or small group of individuals.
It is design as a non-corporate entity which emphasizes tailor-made services to each client, without the need for any significant investments in physical or human resources.
Proprietorship firms offer their services on an hourly basis, direct billing to customers, and are able to offer more personal service due to the lack of bureaucracy compared with corporate firms.
As with partnerships, the owners of a proprietorship firm are personally responsible for any debts that the firm has. This is because a proprietorship firm is not, in itself, a separate legal entity. However, if it is incorporate, the owners will be liable to pay any debts from their own funds. This is an important distinction from a partnership where each partner will not necessarily held to account for all liabilities incurred by other partners.