Sole Proprietorship; License Renewal and Contract Drafting



Hi Startup India!

As the founder, sole employee and executive of a video game based sole proprietorship for nearly two years now, I’m looking for some guidance regarding legal documentation work. Thought it would be wise to ask here.

My sole proprietorship was registered under the Shops and Establishments Act with a suitable License in Mumbai in 2015; this License expired in August, 2016.

The proprietorship has now reached a stage where it will making quantifiable progress on the business side of things. This means I will have to renew my License, although I’ve found that this can be done only 15 days prior to expiry.

Since I’ve crossed that time period then, my questions are –

  • Is it truly not possible for me to ‘renew’ my License? If not, does this mean I will have to create a new registration for the proprietorship? Note that I do have a bank account tied to it from my previous license.

  • If so, is there an online portal via which I can register/renew? I’m currently based outside India and would like to register/renew the proprietorship without having to physically make a trip if this possible.

  • Once registration is done, I would like to draft and establish formal agreements with my clients. What would be the best way to do this from outside the country? Can I use an online template, have it signed by both parties and assume that it would stand in the Indian court of law in case of a violation?

Thanks! Looking forward to your help and feedback.


Have tagged a CA and CS who are listed on startups forum to also respond to your query on license renewal.

You can even change your company structure to an OPC under the new Companies Act 2013 to enjoy Limited Liability as a Single Owner of the Company.
In any case you will also need to purchase an export license to publish your games on the app stores and earn dollar revenue. I think everything else would remain the same .

I believe you need a practicing Company Secretary through which you can approach the various govt stakeholders. In the case of registering a company the website it is the Ministry of Corporate Affairs, and the portal links are provided on the home page.
Note - I did sign a declaration while my Company formation was in process that i would be residing in the country for upto 6 months a year. You might need to check on this in your case.

Again , in order to create a legal contract, there are legal advisory firms specifically targetting startups that you can get in touch with , they can help you create legal contracts for a small fee. If your contracts are sufficiently large in terms of dollar value, i am sure you can hire someone to assist you in creating your contracts that would hold ground nationally and internationally.

THere are numerous free templates available for creating apps , software and all kinds of services on Pandadoc.

There was this awesome site called FreenetLaw which has now rebranded as Contractology if you need any T&C and other legal contract documentation..

Al the best.


Thanks for your detailed response, Ron!

I hadn’t known about the OPC aspect of things, but it seems that would require shares to be invested in my company?

Anyhow, I’m not running a game development company but an agency of sorts – one that works with freelance talent to provide them with employment opportunities for a commission of procured earnings. As such then, I wouldn’t need any ‘export license’ I gather?

So then all that remains is to determine if I need to create a new registration or renewal of my old license is still plausible so far after expiration.

Thanks for the recommendation on the legal contracts as well!


Also, what is the general consensus on using an online CA service such as My Online CA to help me through everything? Registration/Renewal and Contract drafting?

Thank you.


Yes OPC is a relatively new concept provided for in the Companies Act 2013 , one that many entrepreneur’s are utlizing to independently set up companies, to take advantage of the protection offered by the limited liability clause , which as a sole proprietor they would not be entitled to under the Indian Law.
Yes if you or your associates wish to setup an OPC, they would need to create equity on a minimum capital investment of at least a 1 lakh , but it will be 100% owned by the the single director on the board, and shares cannot be gifted to others. As such , the ownership of the OPC is in the hands of the single director of the company. In the interest of growth of the company , you can nominate members to your board, but they would not be entitled to shares of the company, as per OPC rules. I believe there are a lot of other advantages too to setup an OPC, in that the compliances are far lesser than for a regular company.
When the company grows beyond a critical mass, the ploy would be to restructure the company as a private limiited , keeping the need to share executive authority and stake with the rest of the board.

Well its best to discuss with a Company Secretary (CS) regarding this. the thumb rule ive been informed is if you are directly / indirectly exporting any thing (service / product) to an entity / person outside our borders, typically you need an export license. A game development startup that would release games on the appstore / playstore and thereby recieve foreign remittance , would then , as i see it , need an export license. I can point you to a CS who can clear the matter up better for you, considering your business model is a liason of sorts, and not actually creating any IP. [quote=“Sean_Braganza, post:3, topic:13097”]
So then all that remains is to determine if I need to create a new registration or renewal of my old license is still plausible so far after expiration.

Yes i would say for now just enquire on renewal if its possible, it seems the most hassle free approach.



Well, always employ / partner with someone whom you can trust to confidently share the ‘real details’ of your startup , especially its revenues.
Some of the CA’s are in the big league, and it does not make sense to tie up as a small agency with them, coz the relationship becomes a bit unwieldy, considering initially you just want someone who can help you understand whats going on in the balance sheet, how the P/L is calculated, deprecation is factored, and that sorta thing.

Bottomline, meet someone who can bring the conversation about company finances to your level of understanding, who is known for their professionalism, and who is patient enough to explain the nitty gritty. Yes you can meet people like this on an online CA service, but i think a referral is a good option too.

This partnership with a good CA/ CS is crucial because now as a small time entrepreneur, we can take time to understand the nitty gritty of the balance sheet and the company incorporation procedure, when your company balance sheet goes into pages, trust me no CA will spend hours explaining everything to you and even you wont have the time or the patience to get into the finances.


Thanks again, Ron.

I understand. However I was looking to make use of something like Hire CA or My Online CA solely for the company registration/renewal hassle.


Yes , contact at least one or two to know the pricing details and your comfort level.

Pls note for the company registration i think you need to get in touch with a CS (Company Secretary) not a CA (Chartered Account), who you typically reach out to for BookKeeping and Auditing of your Company Accounts.


You can even change your company structure to an OPC under the new Companies Act 2013 to enjoy Limited Liability as a Single Owner of the Company.
In any case you will also need to purchase an export license to publish your games on the app stores and earn dollar revenue. I think everything else would remain the same .


Dear Sean,

First of all, I’d like to congratulate you for your successful Sole Proprietorship and I’m also happy to tell you that the things you are looking for are possible. All the process is online, Templates also easily available, Licensing and registrations can also be done online.

The Portal to get your Company Registered as a Private Limited Company, One Person Company, Public Limited or Limited Liability Partnership is which is Government website which deals with all the legal registration under Central Government.

According to me if your work is related to softwares and you are the sole person who is handing the Business then you should go for One Person Company registration which gives you the access to the next level of doing business.

Things like

  • Getting Funds
  • Memorandum of the Company
  • Separate Legal Entity
  • Limited Liability
  • Lesser Compliance in Comparison to others models

There are many things you will get as One Person Company. And in future, if your company is running fine and you are generating revenue in crores then you can simply convert it to into the next level model which is Private Limited Company.

In the whole suggestion I’ve not talked about Limited Liability Partnership, Although it has much less compliance cost in comparison with all business models BUT it doesn’t have the privilege to convert itself into the next level business. And all the benefits (except less compliance cost) are available in other business models.

Conclusion: If I were at your Place, First I’ve applied for the Trademark of the Brand Name to safeguard the name by raising the Legal Protection to it. Then Register a One Person Company and run the business. If OPC will run then I’ll convert it Private Limited Company.

To Learn more about this stuff please visit the links below
Company Registration India
Knowledge of Corporate Law


Thanks for taking the time to give me a detailed response, Tejas. I appreciate it.