Advantages of Sole Propreitorship

No Governing Law

A sole proprietorship isn’t governed by a separate law and involves minimal regulations. No mandatory incorporation is required—usually, just a business license is enough to operate legally and reliably.

No Profit Sharing

The owner retains all profits from the business, with no obligation to share them, and can freely withdraw earnings for personal use as the sole stakeholder.

Less Formalities

Sole proprietorships involve minimal formalities, making them easy to start and manage.

Less Compliance Cost

With minimal compliance requirements, it’s a cost-effective option compared to other business structures.

Who and why should you opt for it?

Ideal for small-scale entrepreneurs, this business model offers freedom from complex legal formalities and is preferred for its simplicity in operation and management.

Documents required for Incorporation

ID Proof of the Owner
Address Proof of the Owner
No Objection Certificate from the owner of the premises (if the premises is not owned)
Passport Size Photograph of the Owner
Utility bill for the premises

Process of Registration

1. GST Registration
2. Opening Current Account
3. Shop & Establishment
4. Trademark Registrationnt

Business Entity Comparison

Feature	One Person Company	Private Limited Company	Limited Liability Partnership	Partnership Firm	Proprietorship Firm
Applicable Law	Companies Act, 2013	Companies Act, 2013	Limited Liability Partnership Act, 2008	Indian Partnership Act, 1932	No specified Act
Registration	Mandatory	Mandatory	Mandatory	Optional	No
Number of Owners	Only 1	2 - 200	2 - Unlimited	2 - 50	Only 1
Separate Legal Entity	✔	✔	✔	✖	✖
Liability Protection	Limited	Limited	Limited	Unlimited	Unlimited
Statutory Audit	Mandatory	Mandatory	Not Applicable	Not Mandatory	Not Mandatory
Ownership Transfer	No (Restricted)	✔	✔	✔	✖
Perpetual Existence	✔	✔	✔	✖	✖
Foreign Investment	✔	✔	✔	✔	✖
Taxation Liability	Moderate	Moderate	High	High	Low
Compliance Requirement	Moderate	High	Moderate	Low	Low

Sole Propreitorship