What type of business organization is owned by a single individual?

A sole proprietorship is a business organization that is owned and operated by a single individual. This structure is characterized by the simplicity of formation, where the owner has complete control over all decisions, profits, and management of the business. In a sole proprietorship, there is no legal distinction between the owner and the business, meaning that the owner is personally liable for any debts or obligations the business incurs. This type of organization is often chosen by small business owners or individual entrepreneurs due to the ease of setup and minimal regulatory complexities compared to other business forms.

Other business structures, such as partnerships, corporations, and LLCs, involve multiple owners or have specific legal protections and requirements that differentiate them from a sole proprietorship. For instance, partnerships involve two or more individuals sharing ownership, while corporations are separate legal entities that can own assets and incur liabilities independent of their shareholders. An LLC, or Limited Liability Company, provides liability protection to its owners while allowing for flexible tax treatment, making it distinct from the straightforward ownership structure of a sole proprietorship.