TaxTMI 
TaxTMI 
Whether Proprietorship firm ,represented by an individual as proprietor ,can be shareholder of a pvt limited company in India?is there any restriction of becoming a shareholder as capacity as proprietorship firm in stead of individal himself for whom no restriction as any individual can be shareholder
Proprietorship firm - a shareholder
04 Mar 2009 
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Proprietorship firm may hold shares when its sole proprietor acts as member, as no statutory bar exists.
A proprietorship firm lacks a separate legal personality and is a trading name of the sole proprietor; shareholding is therefore effected by the natural person who is the proprietor. The respondents indicated there is no explicit prohibition in the Companies Act preventing an individual from acquiring shares in the name of a proprietorship concern, so shares in the name of the proprietorship are treated as held by the proprietor. (AI Summary)
A proprietorship firm lacks a separate legal personality and is a trading name of the sole proprietor; shareholding is therefore effected by the natural person who is the proprietor. The respondents indicated there is no explicit prohibition in the Companies Act preventing an individual from acquiring shares in the name of a proprietorship concern, so shares in the name of the proprietorship are treated as held by the proprietor. (AI Summary)