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Sole Proprietorship

A Sole Proprietorship is a type of business. In fact, it's the most common type – around 70% of businesses are Sole Proprietorships. The reason there are so many is because they're easy to set up and maintain. A Sole Proprietorship has a single owner, which is different from a corporation or partnership, and because of that they offer some great advantages.

One of the primary advantages is that accounting is very simple. The business doesn't pay corporate taxes, the owner simply pays income tax on profits generated. Another big advantage is there's no board, or partner to discuss business decisions with—the owner may make any business decisions as they see fit.

There are disadvantages too. With a Sole Proprietorship, your business isn't separated from you as an individual... meaning your assets and personal wealth are connected to your business. Ultimately what this means is that there's extra risk if your business goes under, which is why some business owners choose to move to an LLC.