A sole proprietorship is an unregistered type of business entity formed to carry out small to micro-sized business operations under a specific trade name or an individual name. For the purpose of income tax and GST registration, this type of unregistered business entity uses an individual PAN number.
It is the simplest of form of running business with very less compliance requirements as individual income tax provisions is applicable on it. In other words, this business does not have any separate identity under the law because sole proprietorship entity and individual running that business are treated as same entity legally.
To start sole proprietorship documents like Aadhar Card, Individual PAN Card, Bank Account
Registered office proof are required. However, to take any specific trade name registration under SMEs, MSME, Shop and Establishment Act or GST registration is to be taken.
In case of any issues or liability in the said entity/business, then the individual is held personally liable for it i.e., unlimited liability.