Business Definitions: Definition of Sole Proprietorship
Definition of Sole Proprietorship: A sole proprietorship is the simplest form of business. One person owns the entire business - earning all profits, owning the assets and assuming all the losses and liabilities.
The majority of all small business start out as sole proprietorships. These firms are owned by one person, usually the individual who has day-to-day responsibility for running the business. Sole proprietors own all the assets of the business and the profits generated by it. They also assume complete responsibility for any of its liabilities or debts. In the view of the law and the public, you are one in the same with the business.The owner needs to secure the necessary licenses, tax identification numbers, and certifications in his or her name, and you are now in business.
Definition of Sole Proprietorship - chosen for start-up
A sole proprietorship is frequently chosen for start-up businesses because it is easy to organize and flexible to operate. Sole proprietors are considered to be self-employed.
Sole proprietorship taxes are reported on IRS Form 1040, Schedule C, as part of the owner’s personal income tax return.