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A sole proprietorship is a business entity that is owned, managed and controlled by one person. It is one of the most popular forms of business in India, used by small businesses operating in mostly the unorganized sectors. Proprietorship firms are very easy to start and have very minimal regulatory/statutory compliance. A proprietorship firm can be established by getting a tax registration or a license based on the nature of business and there is no specific registration of the ‘proprietorship’ itself.

As a result of it being a simple business that requires no registration by itself, but only business nature related registrations (such as sales tax, service tax), it has almost none of the compliances required of companies. On the other hand, the risks associated are greater.

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