Overview of Sole Proprietorship Business
A Sole Proprietorship business sometimes referred to as a “one-man business” is a type of business that is started and run by one person with the sole motive of serving to meet a need and making a profit.Sole Proprietorship is arguably one of the most popular business structures in Nigeria. It is a form of business that many Nigerians like Tailors, Carpenters, Technicians, Barbers, and Grocers start on a small-scale, because it is easy to establish, and registration is uncomplicated.Unlike other companies, it adheres to minimal compliances that make the business journey more seamless. One person is responsible for handling the entire business affair. This person is the sole financier, controller, and manager of the business.The Business cannot sue nor be sued in its name because it is not distinct from the owner. Sole proprietors in Nigeria don't pay any corporate income tax, since they are not legal entities.
Features of Sole Proprietorship Business
Here are some of the salient features of Sole Proprietorship entity;
1
Single Ownership
A sole trading concern is owned by one individual. It is run entirely at his risk of loss. The sole trader provides both capital and management to the business.
2
Personal Organization or Common Identity
Sole tradership concern has no separate legal entity independent of the owner. The owner and the business concern are one and the same. The owner owns everything the business owns and he owes everything the business owns.
3
Capital
In sole proprietorship, the capital is employed by the owner himself from personal resources. May also borrow money from friends and relatives if he/she cannot depend solely on personal resources.
4
Unlimited Liability
The liability of the proprietor for the debts of the business is unlimited. The creditors have the right to recover their dues even from the personal property of the proprietor in case the business assets are not sufficient to pay their debts.
5
One Person Control
Sole proprietorship is a one-man show. The sole trader provides management to the business. He takes all the decisions, procures material resources, employs persons and directs and controls the affairs of the enterprise. He is not required to consult anyone else in taking any decision.
6
Profits and Losses
The surplus arising in the business of the sole trader entirely belongs to him and similarly, all the business losses and risks are to be borne by him alone.
7
Risk Bearing
In this form of organisation, the proprietor is the sole beneficiary of profits. If there is a loss, he alone has to bear it. Thus, the risks of business are borne by the proprietor himself.
8
No Special Legislation
Sole proprietorship is not governed by any special legislation. A partnership firm is governed by the Partnership Act, a joint stock company is governed by the Companies Act and co-operative society is by the Co-operative Societies Act. Any person who is competent to contract can start his business as a sole trader.
Benefits of Sole Proprietorship Registration
The key benefits of Sole Proprietorship are listed below:
Requirements for Registering a Sole Proprietorship in Nigeria
You'll have to provide the following details upon Submission;
To complete the Registration of Your Sole-Proprietorship Firm in Nigeria, you'll have to provide the following details upon Submission;
- Proposed Name of the Business (2 Names).
- The objectives and nature of business.
- Address of the Business (Can also be a residential Address).
- Particulars of the Proprietor - Such as; Name, occupation, residential address, email address, phone number, and means of identification (National Identification Card, Data Page of International Passport, Driver’s Licence, or Voter’s Card)
What's included?
Here are some of the features to expect from our Sole Proprietorship Registration package.
Why choose SplashDict?
Fast
Register on our platform in 5 minutes - we'll then prepare and file all the necessary documents.
Efficiency
100% digital processes - ensuring smooth delivery, from anywhere, anytime.
Reliable
Founders can always rely on us to securely manage their confidential information—safe from any unauthorized and prying eyes.
Transparent pricing
No hidden fees, no bad surprises - helping you plan ahead.
Our Process
Make Payment Online
Add the product to the cart below, then proceed to checkout and complete the secured online payment.
Tell us about your business
Come up with a name for your business and Answer a few questions. Our easy online form can be completed in just 5 minutes or less.
We'll process Application
Based on the information you provide, We will process and file the documents.
Receive your documents
Once your incorporation documents have been approved by the Federal Ministry, you will receive your completed business entity package by e-mail/mail.
Frequently Asked Questions (FAQs)
You can find some of our most frequently asked questions below;
A sole proprietor has complete control over the revenue and operations of their business. However, the sole proprietor is also personally responsible for all debts, lawsuits, and taxes their company accrues. So, if their business is sued, personal assets like their home, credit score, and savings are unprotected.
A sole proprietor has complete control over the revenue and operations of their business. However, the sole proprietor is also personally responsible for all debts, lawsuits, and taxes their company accrues. So, if their business is sued, personal assets like their home, credit score, and savings are unprotected.
Below we will list some examples of Sole proprietorship businesses that are run by sole owners.
- Grocery store
- Computer repair services
- Tutorial services
- Small traders
- Fast food vendors
- Manufacturing businesses
- Home healthcare ( such as cooking meals, cleaning homes, etc.)
- Online Vendors
- Freelancers, and others.
Name Search: 6 - 24 hours from submission.
Grant of Certificate of Registration: 24 -96 Hours from filing.
Total time: Approximately 2 - 7 days.
To complete the Registration of Your Sole-Proprietorship Firm in Nigeria, you'll have to provide the following details upon Submission;
- Proposed Name of the Business (2 Names).
- The objectives and nature of business.
- Address of the Business (Can also be a residential Address).
- Particulars of the Proprietor - Such as; Name, occupation, residential address, email address, phone number, and means of identification (National Identification Card, Data Page of International Passport, Driver’s Licence or Voter’s Card).
You need a unique identity for your business. You don’t want people confusing your business for another person’s own. A unique name helps to separate your business from others.In Nigeria, without a business name registration certificate, you cannot open a bank account for your business. Business name registration is also required for obtaining a tax clearance for your business. Without proper business registration, you cannot pay taxes or obtain a tax clearance.Also, people would find it easier to do business with you when they see your business is duly registered. There is something that feels illegitimate about an unregistered business.
Sole proprietorship and One-Person Company are two different forms of ownership. In a sole proprietorship, a business is managed and controlled by a person.However, in the case of an OPC, an individual can commence the operation as per the rules and regulations of laws. Moreover, an OPC is registered under the Registrar of the Company.A limited liability company (LTD) provides the business owner with liability protection and tax advantages, while sole proprietors bear personal liability for their business. Additionally, an LTD can be owned by investors, while a sole proprietorship is usually owned and managed by an individual.
Learn More form our Blog
We've put together some articles that might interest you.
