Sole Proprietor

Sole proprietors are owned by one person (or husband and wife) and are the most common type of ownership.

Sole proprietors are personally liable for business debts. This means if your business fails and you have unpaid business debts, you must use your personal assets to pay the debt. Also, your business credit and your personal credit are the same, which is fine if they are both good, but a problem if either are bad.

When you fill out contracts, the legal name of a sole proprietorship is the owner's personal name. By identifying yourself as a sole proprietorship, others may think that your business is small.

Despite these drawbacks, forming a sole proprietorship is the simplest and least expensive business type.