A sole proprietorship is an individual carrying a business activity without incorporating and without a partner. The business and the owner are one in the same. There is no legal distinction between them.
The debts and obligations of the business are the debts and obligations of the owner. What is owned by the business is owned by the owner. If the business is sued, it is really the owner who is being sued.
If judgments are awarded against the business, they are awarded against the owner. The life of the business is tied to the life of the owner. If the owner dies, the business dies.
Approximately 70% of all businesses in the United States are operated as sole proprietorships. They are easy and inexpensive to set up. For more information on this topic, see your local SBDC.
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