When a business is decided to be set up under single ownership, there is practically no legal formality involved. Of course, to run certain types of business activities permission has to be obtained from the Government or local authorities. For instance, to open a restaurant, the individual proprietor has to get the permission from the Health Department of the Municipal Corporation. To start a workshop or factory, the proprietor must get the permission of the Director of Industries through the District Industries Centre. So Yes, the sole proprietor can the sole proprietor cannot be compelled to pay his business debts be compelled to pay his business debts.