THE DIFFERENCE BETWEEN PROPRIETORSHIP AND PRIVATE LIMITED

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THE DIFFERENCE BETWEEN PROPRIETORSHIP AND PRIVATE LIMITED

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One of the key points to choose when beginning a company in Pakistan is the organization that the company will take. There are 2 common types of business structures - Sole proprietorship and Private limited company.

COMPARING SOLE PROPRIETORSHIP WITH PRIVATE LIMITED COMPANY

SOLE PROPERTIES

No separate legal identity
 Owned by one person
Unlimited liability
 The owner is personally liable for the debt and loses of the business.
Minimal filing requirement
 Tax is assessed in the owner's tax returns.

PRIVATE LIMITED COMPANY PLC

Separate legal entity
 Distinct from shareholders and directors.
limited liability
 Shareholder liability is limited to his investment in the company..

SOLE PROPRIETORSHIP

Not eligible for corporate Income Tax rebate(CIT) rebate and SME cash grant. Sole Proprietorship may enjoy a personal income tax rebate from time to time.

Which form to choose?

Businesses with high profits may benefit from a private limited company structure in the form of tax savings and scalability even after taking into account the additional compliance requirements. Choose the structure most suitable for your business needs and aspirations.

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Read more about business registration and the services we provide from our website: spectrum tech Looking to begin a company?
Our Spectrum consultancy services are meant to give great value and take care of your company's business necessities. If you’re looking to develop and plan to change your Sole proprietorship to a Private limited company, we can support you with the consultancy.