Famous sole proprietors include Pierre Omidyar, who founded eBay; Paul Orfelea, who founded Kinkos; and Ann Withey, co-creator of Smartfood popcorn and founder of Annie's Homegrown. None of these companies currently exist as a sole proprietorship, but each serves as an example of a proprietorship's potential for success.Continue Reading
A sole proprietorship is an unincorporated business structure. The business is owned by an individual who has full responsibility for its finances and legal obligations. The individual’s business and personal assets are intertwined, and business revenue is taxed as personal income. However, sole proprietors may deduct business expenses such as supplies, marketing costs, expenses associated with business use of a car and the cost of maintaining an office.
The sole proprietorship is automatically created when an individual begins a business activity. No special filings are needed, but the state, county or municipality where the business is located may require that the proprietor have a business license or permit. In addition, agencies governing the type of business being conducted may have license or certification requirements.
Businesses that lend themselves to sole proprietorships include those that can be operated from a home office, and with minimal infrastructure. Most real estate agents and freelance writers and artists are sole proprietors, as are many self-employed bookkeepers, caterers, janitorial service providers, tutors and virtual assistants. Repair professionals such as plumbers, electricians and HVAC specialists are often sole proprietors, too.Learn more about Corporations