A sole proprietorship can be interpreted as a type of unregistered business entity that is owned, administered and supervised by one person. Sole proprietorships are ideally one of the most common forms of business in India, deployed by most micro and small business functioning in the unorganised sectors.

Proprietorship can be effortlessly initiated and has a very nominal regulatory compliance requirement for initiation and functioning. However Proprietorship registration is apt only for unorganised, small businesses that will remain small or have a curbed period of existence. Proprietorship is however conceded by other registrations such as services or sales tax registration. It comprises of many shortcomings in the likes of unlimited liability of proprietor and does not have persistent existence. For all these reasons it is evaluated by small merchants and traders as a business structure.