A Sole proprietorship is a business which is owned, managed and controlled by a single person. It is ideal for small traders and merchants. The sole proprietorship is the simplest business form under which one can operate a business. The sole proprietorship is not a legal entity. It simply refers to a person who owns the business and is personally responsible for its debts. Sole proprietorship’s are one of the most common form of business in India and is mostly used by micro and small businessman operating in the unorganised sectors. Proprietorships are easy to start and have minimal regulatory compliance. However, a Sole Proprietorship firm does not offer the benefits like limited liability, perpetual succession, separate legal identityand easy transferability etc which are offered by a Company or LLP.