A Proprietorship (or Sole Proprietorship) is the simplest form of business entity owned and managed by a single individual.
| Feature | Details |
|---|---|
| Ownership | Owned by one person |
| Liability | Owner has unlimited personal liability |
| Registration | No mandatory registration required |
| Taxation | Income is taxed under the owner’s personal income tax return |
| Decision Making | Full control by the owner |
| Continuity | Depends on the owner’s presence |
Easy to start and operate with minimal compliance
Complete control over business decisions
Simple taxation (profits added to individual income)
Low setup and operational costs
Privacy of business information
Unlimited liability – personal assets are at risk
Difficulty in raising capital
Business continuity depends on the owner
Limited scope for expansion
Choose a business name
Obtain a GST registration (if turnover exceeds threshold or applicable)
Open a current bank account in the business name
Register under Shops & Establishment Act (optional, depending on state)
Obtain other licenses or registrations as per business type (FSSAI, Import Export Code, etc.)
Income taxed as individual’s income in ITR-3 or ITR-4 (if presumptive taxation opted)
Owner must maintain proper books and pay advance tax if applicable
