When you want to experiment or validate an idea, then sole proprietor is the best option, with the least formalities and regulation. A simplest and easiest form of business, the sole proprietorship requires the least number of documents.
The only process is a current account in the name of the firm is required so that all the transactions of the firm can take place through the same. However, to open a current account, most of the banks require a Shops & Establishments Registration.
Respond to Income tax notice
Yes, the proprietor and the proprietorship firm are considered to be a single entity. Any profit or gain through the proprietorship firm is also considered to be the proprietor’s personal gain. If one cannot pay the debts of the firm, personal assets come into play.
Registration is not mandatory, may or may not be required, depending on the business the proprietor wants to establish. However, to open a current account, most of the banks require a Shops & Establishment Registration.
Information that needs to be furnished for Shop and Establishment License Registration:
Yes, it is possible.
GST Registration is only compulsory for firms with a turnover greater than INR 20 lacs per year.