Sole Proprietorship Overview
A sole proprietorship is owned by one person. It is not a separate legal entity. The company and owner are the same. A sole proprietorship is often exempt from incorporation and registration rules, making it simple to set up to manage a small or medium business.
As the owner of a sole proprietorship, you can identify yourself as a sole proprietor. Most Uber and Lyft drivers report income as sole proprietors on their personal tax return.
Legal Aspects of Sole Proprietorship
A sole proprietorship does not have a separate law to govern it. Few special rules and regulations must be followed. The business owner is personally liable for all debts. Examples include local grocery stores, clothes stores, artists, writers, IT consultants, and graphic designers.
Establishment and Ownership
Sole proprietorships are easy to establish due to the lack of government involvement, making them popular with small business owners and contractors. They can be created simply and do not require formalities, allowing business activities to start quickly.