A sole proprietorship firm is a business structure in India that is owned and managed by a single individual. This form of business ownership is straightforward and ideal for small businesses and self-employed individuals. The proprietor has complete authority and is accountable for all aspects of the business, including its debts and liabilities. The Indian Partnership Act, 1932, governs this type of business. There is no requirement for registering a sole proprietorship firm with the Registrar of Companies in India. However, depending on the business’s nature, some licenses and permits may be necessary from the local authorities.

In a sole proprietorship, the proprietor is the sole owner of the business and is entitled to all profits. The business is not considered a separate legal entity, and as a result, the proprietor is personally responsible for all debts and losses incurred by the business.