A sole proprietorship is a business owned and operated by a single individual. It is the simplest form of business ownership to establish, requiring no formal registration with government agencies. As the sole proprietor, the individual has total control over the business and assumes all profits and liabilities. They report business income and expenses on their personal tax return and pay self-employment taxes.

2. 
A
sole
proprietorship
is
a
business
established, owned, and controlled by a single person.

Sole proprietorships come in all shapes and sizes.

The owner realizes all the profits and assumes
responsibility for all losses.

4. 
Of the four forms of ownership, the
proprietorship is by far the easiest to form.
sole

The government exercises very little control over the
establishment of new sole proprietorships.

Start-up can be immediate and simple.

You may need to obtain licenses or permits for your
particular type of business.

5. 
Sole proprietorships are simple to start. No formal
action is required.

A sole proprietorship may be started immediately.

The owner has total control of all aspects of the
business.

The owner receives all the profits.

The business itself pays no income tax; the owner
pays income tax as an individual.

6. 
The owner has unlimited responsibility for
losses, debts, and other liabilities the business might
develop.

The owner must make all the decisions.

The owner is the only person who can arrange
financing or capitalization.

The existence of the business ends upon the owner’s
death.

7. 
Sole proprietors make all the decisions regarding the
operation of the business.

The assets of sole proprietors are not considered legally
separate from the assets of the business.

Owners of sole proprietorships report business income
and expenses on their personal income tax returns.

8. Partial list of tax forms
 Form 1040: Individual Income Tax Return
 Schedule C: Profit or Loss from Business
(or Schedule C-EZ)
 Schedule SE: Self-Employment Tax
 Form 1040-ES: Estimated Tax for Individuals
 Form 4562: Depreciation and Amortization
 Form 8829: Expenses for Business Use of Your
Home
 Employment Tax Forms