ABA Family Legal Guide

Forming and Operating a Small Business

Types of Business Organizations

Sole Proprietorships

What is a sole proprietorship?

If you're the sole owner of your company and don't create a corporation or some other form of business, then, know it or not, like it or not, you're a sole proprietorship. If there is more than one owner or the business is incorporated as a corporation, a process that is described later in this chapter, it cannot be a sole proprietorship.

A sole proprietorship can have employees, however. And, except for a few restrictions that vary from state to state, it can operate any type of business.