Sole proprietorship

Definition

A sole proprietorship is a business owned and operated by one individual, where there is no legal distinction between the owner and the business entity. It is the simplest form of business ownership and doesn't require formal registration apart from necessary licenses and permits.

Related terms

Liability:

In a sole proprietorship, the owner's personal assets can be used to satisfy business debts and liabilities due to the lack of legal distinction between the owner and the business.

Business License: A permit issued by government authorities that allows individuals or companies to conduct business within the government's geographical jurisdiction.

Self: Employment Tax - A tax consisting of Social Security and Medicare taxes primarily for individuals who work for themselves, directly applicable to sole proprietors.