Glossary
Sole Proprietorship
A sole proprietorship is an unincorporated business owned and run by one person, with no legal line between the owner and the business. The owner reports all business income on their personal tax return and is personally responsible for every debt and obligation the business takes on. It is the simplest and cheapest way to start out, but that unlimited personal liability and the lack of tax deferral are why many owners eventually incorporate. We weigh the trade-offs in our sole proprietor versus incorporation comparison.
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