What is a Sole Proprietorship?
A sole proprietorship is an unincorporated business that is owned by one individual or a marital community and legally has no separate existence from its owner. In a sole proprietorship, the limitations of liability enjoyed by a corporation do not apply. For example, all the debts of the business are debts of its owner. Since a sole proprietorship is not a corporation it does not pay corporate taxes. Rather, the person who organized the business pays personal income taxes on the profits made. Many sole proprietors will operate under a trade name, or will "Do Business As" (DBA) a name other than their own. This allows the sole proprietor also to open a business account with banking institutions.