Proprietorship
- Art Teacher
- London, UK
- 5-7 Hrs
A proprietorship, often called a sole proprietorship, is one of the simplest and most common forms of business ownership in India. It is owned and managed by a single individual, making it ideal for small traders, shopkeepers, freelancers, and service providers. Unlike companies or LLPs, a proprietorship is not a separate legal entity from its owner—meaning the owner and business are legally the same. This results in easy decision-making and fewer compliance requirements. Starting a proprietorship is straightforward, with minimal legal formalities and lower setup costs. However, the owner bears unlimited liability, meaning personal assets could be at risk in case of business debts. Proprietorships do not require formal registration unless specific licenses, such as GST or trade licenses, are needed. Many small businesses choose proprietorships for their flexibility and ease of operation.
- Aadhaar Card of proprietor
- PAN Card of proprietor
- Passport-sized photographs
- Address proof of business (utility bill, rent agreement, etc.)
- Bank account proof (cancelled cheque/passbook)
- GST registration certificate (if applicable)
- Trade license / Shop & Establishment Act license (if applicable)
- Decide the business name and type of activity.
- Obtain necessary licenses (GST, trade license, FSSAI, etc., if applicable).
- Open a current bank account in the business name.
- Maintain proper books of accounts for taxation and compliance.
FAQs
Registration of a proprietorship as a separate legal entity is not mandatory in India because a sole proprietorship is not a distinct legal entity from the owner. However, certain registrations like GST, trade license, and UDYAM (MSME) registration are required depending on the business nature and turnover
A proprietorship can operate under multiple trade names, but each trade name used for business may require separate registration or compliance.
There is no legal limit on how many proprietorship businesses an individual can own, as each business is considered an extension of the owner personally.
There is no minimum capital requirement to start a proprietorship in India. One can start a proprietorship business with any amount of capital as per their convenience.
A foreign national cannot directly start a sole proprietorship in India. Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs) may have certain rights to invest but foreign nationals typically need to use other business structures like LLP or private limited companies
A proprietorship cannot be "transferred" as a whole business entity because it is inseparable from the owner. However, the assets, liabilities, and goodwill of the business can be sold or assigned to another person.