Q.'A sole proprietorship needs no compulsory registration to exist, yet it may still require certain licences.' Explain with two examples.

The absence of a registration requirement for the form itself must not be confused with an absence of all legal requirements for the particular trade the proprietor carries on. …

A sole proprietorship is governed by no special law, and generally requires no compulsory registration merely to come into existence — a person can simply start the business. This is what makes it the easiest form of organisation to form. However, this does not mean the proprietor faces no legal requirements at all; depending on the nature and scale of his particular trade, he may still have to obtain trade-specific licences. For example:

1. GST registration — if the turnover of the business crosses the threshold limit fixed under the Goods and Services Tax law, the proprietor must register for GST and file the required returns.
2. FSSAI licence — if the business deals in food (say, a restaurant, bakery or food-selling unit), it must obtain a licence/registration from the Food Safety and Standards Authority of India. …

Treating trade licences (GST, FSSAI, Shops and Establishments) as if they registered the proprietorship as a separate legal entity — they regulate the activ …