A Sole Proprietorship is the simplest and most common form of business in India. It is owned and managed by a single individual. There is no legal distinction between the owner and the business, which means the owner is personally responsible for all profits, losses, and liabilities of the business.
This type of business is easy to start, has minimal compliance requirements, and is ideal for small-scale operations like local shops, freelancers, or home-based businesses. Registration is not mandatory, but the proprietor may need to obtain licenses or registrations like GST, MSME, or a shop and establishment license, depending on the nature of the business.
One key limitation of a sole proprietorship is that the owner's personal assets can be at risk if the business faces debts or legal issues, as there is no limited liability protection.
Despite this, it remains a popular choice for individuals starting small businesses due to its low cost, ease of operation, and full control over decision-making.