A sole proprietorship is an unincorporated business with one person or a married couple as the owner.

According to IRS data , more than 70% of small businesses are organized as sole proprietorship, without a doubt making this the most common type of business entity.

Unlike corporations and limited liability companies (LLC), which are state-registered business entities, a sole proprietorship doesn’t require you to file formation papers with the state.

When it comes down to it, sole proprietors are fully, personally liable for the business’s debts and obligations. That means creditors and legal claimants can go after your personal assets  (e.g. your car, your personal bank accounts, your home in some cases) to get their money.

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