Composites developed from inexpensive, renewable, sustainable, and abundant bioresources such as groundnut shells (GNS) do not have the adequate properties required for commercial applications. Hence, most of the biocomposites developed from agricultural wastes or biomass are not used for practical applications. In this study, we have demonstrated that the addition of compatibilizers and flame-resistant chemicals considerably enhances and makes the properties of GNS-reinforced polypropylene (PP) composites suitable for commercial applications. One maleated polypropylene (MAPP) and two acrylic-based compatibilizers (ABC1 and ABC2) were chosen and added into the composites in different proportions (1% to 5%). Ammonium polyphosphate (APP) was used to increase the flame retardancy of the composites. Ratio of reinforcement and matrix and composite forming conditions were also changed to achieve maximum benefits, and composites containing up to 80% GNS were developed. Tensile strength showed a good increase of 48%, whereas modulus showed a decrease of 35% with the addition of ABC2. However, the flexural strength and modulus of the composites increased with the addition of even 1% MAPP. The mechanical properties of the composites decreased when excess (5%) compatibilizer was used, probably due to agglomeration or an increase in incompatibility. Adding 3% of APP significantly improves both the flammability rating, LOI, and thermal properties. The highest flame resistance rating of V0 was obtained for both ratios, with the LOI increasing by about 40% and the conductivity decreasing marginally from 0.982 to 0.808 W/mK. Further, reduction in water absorption and hence increase in durability were also possible.