This is the simplest form of business existence and refers to those businesses which have a single owner and the entire business‟s profits and losses are taxed under the owner‟s income tax filling. The owner is inseparable from the business and is entirely liable for all the losses and debts along with the profits and income of the firm. In this mode of business establishment, the owner doesn‟t have a lot of legalities and documentations to worry about. However, a sole
proprietorship is not a legal business entity.

To Start a Proprietorship Firm, No proprietorship registration is required as such, The registrations like Registration under Shop & Establishment Act, MSME Registration , GST Registration are required as these are necessitated due opening of current account in the bank and to the activity which the proprietorship intends to do and is common to all forms of business.

Key Features of Proprietorship Firm

• 1 Person Required as Single Entrepreneur
• Single Owner of the Business
• Easy to Start and Easy to Close.
• Complete Control.
• Lower Cost of Formation and Compliance.

Disadvantages of Proprietorship Firm

• Lack of Resources
• Unlimited Liability.
• Lack of Credibility.
• Cannot raise funds easily.
• Cannot add Partners.