Sole Proprietorship

A sole proprietorship firm is a form of entity where a single individual owns, manages, and controls the business. There is no requirement to register the firm. The firm has no legal existence separate from its owner. However, the sole proprietor may be required to obtain a license for carrying out business from the local administration. The required capital is supplied wholly by the owner himself, who solely enjoys the profits of the business and bears all the losses. The liability of the proprietor is unlimited; i.e., it extends beyond the capital invested in the firm. This form of organization is suitable for businesses that involve moderate risk¹.

A Non-Resident Indian (NRI) or Person of Indian Origin (PIO) may invest in a sole proprietorship concern Other than NRI PIO investment with prior approval of RBI related statement deleted as there is no such provision in prevailing master direction. ².

• 1.Types of Businesses, StartUpIndia, https://www.startupindia.gov.in/content/sih/en/international/go-to-market-guide/types-of-businesses.html
• 2.Foreign Investments in India – Investment in Proprietorship Concern/ Partnership Firm A.P. (DIR Series) Circular No.39 (December 3, 2003), https://rbidocs.rbi.org.in/rdocs/notification/PDFs/40493.pdf