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Small business resources and information

Sole Proprietorship

Sole Proprietorship

sole proprietorship, also known as a 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.

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.

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.

Advantages and disadvantage of sole proprietorship

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