No suit can be instituted by a sole proprietorship firm in its own name unless there are specific amendments stating that proprietorship sues thorough its proprietor – Neev Construction Vs. DCOM Systems Limited – NCLT
NCLT held that it has been recognised in number of decisions that a proprietorship concern unlike a company or a partnership is not a legal entity and therefore any proceeding initiated by it would be a nullity. Thus, a proprietorship firm is not a legal entity – it is only the proprietor of the firm who is a legal entity and as such the petition should have been filed by the sole proprietor in his name on behalf of his sole proprietorship firm.