Sole Proprietorship
An unincorporated business owned and run by one individual, with no legal separation between the owner and the business.
Because a sole proprietorship isn’t a separate legal entity, the owner is personally responsible for all business debts and obligations, and business income is typically reported on the owner’s personal tax return rather than a separate business return.
This lack of separation matters directly for financing, since a lender is effectively evaluating the owner personally, and there’s no liability shield between business debt and the owner’s personal assets the way an LLC or corporation would provide.
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