A business in which one person owns all the assets, owes all the liabilities, and operates in his or her personal capacity.
This is the most basic form of business. It is a lemonade stand. A kid’s lawn cutting business. If you are doing business by yourself and keeping all of the money you make, it is a sole proprietorship. Sole proprietorships do not offer any form of limited liability. There is no distinction between the person doing the business and the business. All obligations, liabilities, profits, and property are owned by the individual. If you work for yourself and do not take any action to form an entity, you have elected to operate as a sole proprietorship.