Sole Proprietorship

What is the meaning of Sole Proprietorship?

A sole proprietorship firm means a type of business entity that is owned, controlled and managed by a single person. The owner of the Business is called Sole Proprietor of the Firm. As the business is run by a natural person, there is no legal difference between the promoter and the business. The promoter himself receives all the profits. Sole Proprietorship firm does not require any formal registration.

The key feature of sole proprietorship firm is that it is very easy to start as there are less legal formalities and lesser formation costs involved.

Sole Proprietorship Firm Registration:

• The government of India has not prescribed any sole proprietorship firm rules and regulation in India or there is no registration mechanism for Sole Proprietorship Firm registration.
• Thus, the registration of a proprietorship can only be recognized through tax registrations that the business is required to have as per the rules and regulations.
• These tax registrations may include GST Registration and/or SSI/MSME / Udyam Aadhar Registration that should be obtained in the name of the Proprietor to establish that the Proprietor is operating a business as a sole proprietorship.