One of the biggest online retailers in India, Flipkart is renowned for the variety of goods and services it offers. The ownership structure of the company has changed over the course of its more than ten-year existence. People disagree on whether Flipkart is a sole proprietorship or not, which has caused some misunderstanding. This essay will examine this query and offer solutions to some associated questions. Flipkart: Is it a Sole Proprietorship?
Flipkart is not a sole proprietorship, incontestably. It was established in 2007 by Binny and Sachin Bansal, who at first operated it as a partnership. It was later formed in 2008 as a private limited company. Walmart purchased Flipkart in 2018 and now holds a majority share in the business. It is not a sole proprietorship as a result.
You have total control over the company’s activities as a sole proprietor because you are the only owner. As a result, it is up to you to decide how much and whether you pay yourself in one or two wages. The fact that you are a sole proprietor and must pay self-employment taxes on your income should not be forgotten, though. As a result, splitting your income into two wages might not result in a tax savings.
If a sole proprietor overpaid taxes throughout the year, they may be eligible for a tax refund. To ensure you are paying the appropriate amount of taxes, it is crucial to maintain accurate records of your income and outgoings. You are liable for paying self-employment taxes as a sole owner, which include Social Security and Medicare taxes. Keeping track of your earnings and outgoings will also enable you to ascertain whether you qualify for any credits or deductions that could reduce your tax obligation. Why Is a Sole Proprietorship the Best Structure?
The simplest type of business structure is a sole proprietorship, which is favored by many small business owners. It is simple to set up and manage, and you have total command over how your company conducts business. Additionally, you can write off business expenses on your personal tax return and you are not required to pay corporation taxes. The unrestricted personal accountability for corporate debts and probable difficulties in raising money are some disadvantages of this structure.
You are liable for paying self-employment taxes on your earnings as a solo proprietor. Included in this are the taxes on Social Security and Medicare, which normally account for 15.3% of your net income. To guarantee that you have enough to satisfy your tax liability at the end of the year, it is advised that you set aside at least 25 to 30 percent of your income for taxes.
In conclusion, Flipkart is not a sole proprietorship, and its company form differs significantly from other business arrangements in a number of important ways. As a single proprietor, it’s critical to maintain thorough records of your earnings and outgoings, to budget for taxes, and to comprehend the benefits and drawbacks of this type of corporate structure.