ABA Family Legal Guide

Forming and Operating a Small Business

Types of Business Organizations

Sole Proprietorships

What are the advantages of a sole proprietorship?

It is an inexpensive and informal way of conducting a small business. In fact, it's the simplest form of business organization. The only statutes that deal with its organization or operation are those that apply to all businesses. In contrast, many laws spell out the legal requirements of a corporation, a limited liability company, or a partnership. A sole proprietorship gives you an opportunity to own your own business without the formalities and expense of incorporation or the necessity of sharing control of the business with partners or shareholders in a corporation.