Sole proprietorships

A sole proprietorship is a simple business structure where one individual owns and operates the business. The owner has full control and makes all decisions, and the business’s profits or losses directly affect their personal income. There’s no legal separation between the owner and the business, meaning the owner is personally responsible for debts and liabilities. This setup is common for small businesses or freelancers because of its ease of formation, minimal regulatory requirements, and straightforward tax reporting. However, the owner bears all risks and liabilities, which can be a disadvantage as the business grows.