Sole Proprietorship

A sole proprietorship is a form of business owned and operated by one person, in which no legal distinction exists between the owner and the business itself. This structure provides simplicity, complete managerial control, and favorable tax treatment since all profits are reported as the owner’s personal income. However, it also exposes the owner to unlimited personal liability, limits opportunities to raise large amounts of capital, and ceases to exist upon the owner’s death. .

Example: For instance, a freelance graphic designer conducting business independently under their own name without forming a separate legal entity is considered a sole proprietor.