A Sole Proprietorship is one of the simplest kind of format one can follow to do business in India. It is owned, managed and controlled by one person. It is most commonly established forms of business in India, used by small business entrepreneurs operating in the unorganized sectors. These can be started very easily because there are very minimum regulatory compliances required for getting started with a Sole Proprietorship.
However, after getting started, this kind of business do not offer the owner a host of various benefits such as limited liability, separate legal entity, independent existence, transferability, etc., which are generally expected for any business. Therefore, sole proprietorship's is the best option if one is targeting for unorganized, small business that will have a limited presence.
At present there is no statute provided by the Government of India for the registration or incorporation of a Proprietorship. Therefore, the existence of a proprietorship can be established only by tax registrations like service tax, Vat, Shop Establishment, MSME etc. a Proprietorship is required to have as per the rules and regulations.