This is the easiest and common form of business entity in India. Registrations with various government departments are on a need basis. For example, if the business pays service tax then registration with the service tax registration is required. Similarly may be VAT Registration. Proprietors of such firms have unlimited business liability, which means that owner(s)’ personal assets can be attached to meet business liabilities.

Benefits of Proprietorship
Easy to Start

The proprietorship is the simplest form of organisation. It can commence operations on obtaining requisite license and permits.

Operating Independence

The owner, i.e. the proprietor is free to make all decisions as this is the only format which is a single person ownership. No profit sharing, secrecy, and easy dissolution are some of the obvious advantages.


With minimal statutory compliance requirements operating a Proprietorship is relatively inexpensive. Only the proprietor has to pay Income Tax and the firm is not taxed separately and this reduces the tax liability considerably.
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