Small Business Your Leading Source For Legal Information. The easy way to start your business.
Most new businesses begin as a sole proprietorship.
According to the federal Small Business Administration, about four out of five new businesses operate as sole proprietorships. A sole proprietorship is owned entirely by one person, although the owner may have others working for him as employees. A sole proprietorship's chief advantage is the relative ease with which it can be started. Recordkeeping is usually much simpler with a sole proprietorship than with other kinds of business organizations, and filing tax returns is far simpler than for a partnership or corporation. On the negative side, if you operate a business as a sole proprietorship, the law considers the business to be nothing more than an extension of you, the owner.