Definition of Sole Proprietor | Business Entity Option

Accounting Definitions

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Sole Proprietor Definition

An individual who both owns and operates their own business is known as a sole proprietor.

Sole Proprietor Expanded Definition
A sole proprietor is a single person who owns a business. This one person can make all of the decisions and reap all the profits, but is also the only one financially and legally responsible for any losses or debt incurred by the business. There is no separation between the sole proprietor as a person and the sole proprietor as a business. This is referred to as Unlimited Liability and creates an element of risk.

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Last Updated By

Jenna Hutkowski | Apr 18, 2023

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