What defines a sole proprietorship?

A sole proprietorship is defined as a business structure owned and operated by a single individual. This form of business allows the owner to have complete control over decision-making and retains all profits generated by the business. The owner is personally responsible for any debts or liabilities incurred, meaning there is no legal distinction between the owner and the business entity itself. This simplicity in ownership and operation is a defining characteristic of a sole proprietorship, making it one of the most common business structures for small businesses and individual entrepreneurs.