the answer is: A proprietorship was formed when a king granted land to an individual in exchange for a share of future profits.
Proprietorship in the middle colonies has a similar system with feudalism during the middle ages. In this systems, none of the farmers actually own the land where they grow the crops.
The lands all belong to the king and in exchange for profit share, the king allows the commoners to use the land and provide military troops as security to prevent bandits from stealing the production result.