Sole Proprietorship
A sole proprietorship is an unincorporated (not registered) business owned by one person. The owner is the final say in the business and acts as the manager. This type of business practice is the most common in the United States.
You can define a sole proprietorship from either an accounting or legal perspective:
From an accounting perspective, the business and the owner are considered two separate entities.
From a legal perspective, the business and the owner are not considered separate entities, making him or her personally accountable for the debts of the business. In a financial crisis, the creditors can force the owners to sell their personal assets to clear business debts.
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