Image courtesy of user Geralt on

In simple terms, a sole proprietorship refers to a business which is not incorporated and which has only one owner.

(NOTE: A one-person LLC is considered to be a sole proprietorship unless the owner elects to be taxed as a corporation. Remember, the “C” in “LLC” stands for company, not corporation. So, forming an LLC does not mean you’ve “incorporated.”)

Owners of sole proprietorships are called “sole proprietors.”

Sole proprietors report their business activity on a Schedule C attached to their personal Form 1040.

Further Reading

“This blog post, along with comments that may follow, should not be considered tax advice. Before you make final tax or financial decisions, please secure a professional tax advisor to give you advice about your unique situation. To secure Jason as your accountant, please click on the ‘Services’ link at the top of the page.”