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A sole proprietorship, also known as a sole tradership, individual entrepreneurship or proprietorship, is a type of enterprise owned and run by only one person and in which there is no legal distinction between the owner and the business entity.[1] A sole trader does not necessarily work alone and may employ other people.[2]
The sole trader receives all profits (subject to taxation specific to the business) and has unlimited responsibility for all losses and debts.[3] Every asset of the business is owned by the proprietor, and all debts of the business are that of the proprietor; the business is not a separate legal entity. The arrangement is a "sole" proprietorship in contrast with a partnership, which has at least two owners.
Sole proprietors may use a trade name or business name other than their legal name. They may have to trademark their business name legally if it differs from their own legal name, with the process varying depending upon country of residence.[4]
- ^ "What is a sole proprietorship". Default. Retrieved 2024-01-30.
- ^ The Accountancy Partnership, Can a sole trader have employees? Archived 2018-09-22 at the Wayback Machine published 10 March 2012, accessed 22 September 2018
- ^ "What is the difference between a business being sole proprietor and a Limited Liability Company (LLC)? | Falmouth ME". www.falmouthme.org. Retrieved 2024-01-30.
- ^ "Small Business.gov.au - How do I register my business name?". Archived from the original on 2014-08-20. Retrieved 2015-07-13.