This article is mainly dedicated to my foreign investors friends and business owners who are looking to setup a small business in Sir Lanka, as in just the starting state of their venture and mostly low on cash. You have nothing to be worried about as one with such conditions and facts can easily go for Sole Proprietorship Business Registration in Sri Lanka. Business registration of Sole proprietorship and such business in Sri Lanka is mainly conducted or owned by a single owner. This is the main reason for which all these sole proprietor business firms in Sri Lanka are incorporated more often than any other forms of businesses. Yes, it is possible that a company who started their journey in Sri Lanka as a Sole proprietorship, later became large business corporations due to the huge level success and popularity they gained among the customers and locals.
The Sole Proprietorship Business registration in Sri Lanka brings in one biggest advantage for the business owners and investors that they can keep all the company profits with themselves. Well the disadvantage to be considered is that the owners in specific who is said to be personally liable for the company’s debts & actions. In such small business registration in Sri Lanka there is no sort of distinction or limitation between personal and business income, all the company business profit share is simply taxed as personal income to that of the owner or the investor. The existence of all these sole proprietor businesses in Sri Lanka is limited to business owner’s s lifespan.
Another interesting fact to be taken in count for all these Sole Proprietorship Business registered in Sri Lanka is that, as because the total company capital is certainly limited to the amount of proprietor’s personal wealth. As a matter of fact, the business is unable to leverage new business scopes and opportunities because of limitation regarding of insufficient capital availability. On top of that, the Ownership of such companies cannot be easily transfer because it requires the sale of the entire business to a new client or business owner.
This is all about what is takes and what to know regarding business registration of sole proprietorship in Sri Lanka.
Let us now look into the “Pros & Cons” of all these sole proprietorship business registration in Sri Lanka.
|Pros – Advantages — Key benefits of proprietary||Cons – Disadvantages – Limitation of proprietary|
|a) Only one individual personnel is required for incorporation as Single enterpriser.|
|a) Lack of Resources.|
|b) Single Owned Business.|
|b) No limitation regarding Liability.|
|c) Company or business can be easily opened and shut off.|
|c) Lack of credibleness.|
|d) Able to run or maintain the complete management system by own self.|
|d) Company funds cannot be raised at ease.|
|e) Lower capital required for company Formation and Compliance.|
| e) No company partners can be initiated.|
# Legal procedure to be conducted for Sole Proprietorship Business Registration in Sri Lanka :
As per law and regulation in Sri Lanka any sole proprietorship that is incorporated by a different name other than the full name of its owner, provided in his or her NID, it is very much mandatory to register the business name proposed. The authorized personnel who is responsible to register the proposed business name provided by the owners is the Registrar of Provincial Council. The application form required for company name registration can be easily collected from the office of the Divisional Secretariat in Sri Lanka. The Registration fee required is conducted by the Provincial Council.
# Let us now look into the steps that need to be followed for business registration of sole proprietorship:
- Obtaining appropriate application form from the Divisional Secretariat Office.
– An application form for business name registration of the sole Proprietorship business entity.
– An application form from Grama Niladharee that is obtained over the registration of the business name.
- Submission of the certified report obtained from the Grama Niladharee, filled up application forms along with the asked registration fee to the Divisional Secretary.
- After considering on acceptance of the mentioned documents given above, the Divisional Secretary will issue the Certificate of Registration of Business Name. Often this certificate is displayed by the owners at the site of business place.
# The following advantages is achieved due to business name registration conducted by a sole proprietorship.
- Provides an individual identity and recognition
Your business is separately identified from other businesses by the means of the registered business name.
- Provides an ownership of the business name registered
As the business name is often registered under the proposed name of the business owner, hence it ensures the ownership of the business name in specific.
- Easier to obtain loans
Registered companies with registered business names increases the chance of getting loans and financial support from specific supportive companies, insurance and banks.