BUSINESS IN THE HOUSE

BUSINESS IN THE HOUSE

Can you start a home business or will there be cumbersome legalities? A short ready-reckoner.
Generally, there are four types of home businesses:
Sole proprietorship this is an informal, inexpensive proposition, owned by one person. You’re personally responsible for debts and can transfer all or part of the business, and report profit or loss on personal income tax returns. This requires a Permanent Account Number (PAN) and current account under your name or your company’s. This comes in handy in future if you require a loan for ex-pension. Loans are sanctioned on the basis of your company’s turnover, profitability and income tax returns. Partnerships In this, two or more co-owners engage in business for profit. A partnership deed on stamp paper has to be registered in court. Corporation this is a legal entity that is separate from its owners, the shareholders. No shareholder is personally liable for debts, obligations or acts of the corporation. ‘