A sole proprietorship, also known as the sole trader or simply a proprietorship, is a type of business entity that is owned and run by one individual and in which there is no legal distinction between the owner and the business. Some formal definitions of a sole proprietorship are "a business owned by one person who is entitled to all of its profits" (Glos & Baker) and "a business owned and controlled by one man even though he may have many other persons working for him" (Reed & Conover).
The individual entrepreneur owns the business and is fully responsible for all its debts and legal liabilities. The owner receives all profits (subject to taxation specific to the business) and has unlimited responsibility for all losses and debts. Every asset of the business is owned by the proprietor, and all debts of the business are the proprietor's. This means that the owner has no less liability than if they were acting as an individual instead of as a business. It is a "sole" proprietorship in contrast with partnerships. More than 75% of all United States businesses are sole proprietorships. Examples include writers and consultants, local restaurants and shops, and home-based businesses.
Mom and pop store
This is a small proprietor with a small shop.
A sole proprietor may use a trade name or business name other than his or her legal name. In many jurisdictions, there are rules to enable the true owner of a business name to be ascertained. In the United States, there is generally a requirement to file a doing business as statement with the local authorities. In the United Kingdom, the proprietor's name must be displayed on business stationery, in business emails, and at business premises, and there are other requirements.