Structuring your Side Hustle

So you've got a brilliant [[Blog/a-simple-guide-for-validating-new-business-ideas|business idea and keen to build it]] on the side. Your basic product or service is ready and even obtained a few paying customers. Now most would jump straight to start a Private Limited form. But is this the best way forward?

There's a simpler way to start:

• Consider a proprietorship (for solo ventures) or a partnership (for a team of 2 or more)
  • Easier to manage and tax-friendly.
  • Profits you Withdraw are taxed once, against twice in Pvt Ltd.
  • Leverage Section 44AD^{<a href="https://cleartax.in/s/freelance-professional-business-income">1</a>} for an even further tax reduction

• Avoid the hassle of Compliance and paperwork.

  • If you are a director, your existing firm can label this >"moonlighting."

• You can avail most benefits:

  • GST Registration
  • Utilise a trade name for your side hustle,
  • PAN card for partnership firms. Proprietorship you use your PAN
  • Open a current account.

• Unless you advertise it, your current organisation won't know about your side hustle, avoiding any complications.

Key Takeaway: Proprietorship or partnership offers a simpler, more tax-efficient way to run your side hustle discreetly while you commence your entrepreneurial dreams