A Proprietorship has no legal definition attached to it, its a sole owner form of a business which can be started after taking registrations under various acts like SSI, VAT, Service Tax etc.
There has been no provisions to mandate the registration of a proprietorship, but for operating a business under a business it becomes necessary to get it registered under one of the above mentioned acts.
For converting a proprietorship business into a private limited company, there are no set of rules defined. Besides the process for converting a proprietorship business into a private limited is simple and easy.
For that conversion, you simply need to start a fresh private limited company and after the incoporation of a private limited company there must be entered an agreement between the proprietorship and private limited company that all the assets and liabilities of the proprietorship are not transfered to the private limited company so incorporated.