Features of a Proprietorship Firm

Proprietorship is the oldest form of a business and the most common business structure found in India. In fact, all sorts of small shops we come across on a daily basis including our local kirana stores fall under the sole proprietorship model. It’s easy to start a business as a sole proprietor due to ease of setup and nominal cost. To run his or her business, a sole proprietor only needs to register their name and secure the requisite licenses to run the business.


  • No separate law:

           A proprietorship does not have a separate governing law and therefore has to follow special rules and regulations. It’s               not important to get a proprietorship registered but one does require a trade license for the purpose of carrying out                   business legally.

  • Unlimited Liability:

          The owner’s liability is unlimited as there is no separation between the owner and the business. So in case of any debt or            liabilities, the proprietor is bound to pay up. In some situations, the proprietor may have to sell his personal assets to                  meet the debts and liabilities of the business.

  • Risk and Profit:

          The owner of the business has to shoulder the entire burden of the risk as he is the sole owner of the company.                             All losses must be borne by him personally. In case of any profit, it’s an advantage for a proprietor as he does not have               to share his profits.

  • No Separate Entity:

          As the business and owner are the same, a proprietorship does not have a separate legal identity.

  • Continuity:

          The proprietorship has the same identity as the owner. Therefore,  in instances like death, retirement or bankruptcy                   of the owner the business will come to end.

There are many advantages associated with proprietorship as it is the simplest form of business and the owner has full control over it due to which there’s no delay in the process of decision making. Also, it is not mandatory for a proprietorship to furnish its financial accounts and it provides the owner maximum incentives from the business.

Now that you have an idea of both sides of the coin, Team Delfyle wishes you the very best of luck for your amazing journey ahead. In case of any further queries, feel free to get in touch with us at info@delfyle.com for a chat, absolutely free of cost!

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