A sole proprietorship is unincorporated businesses owned by one person and fully conducts the business itself. It is the easiest and used individual assets and properties to form the business. Sole Proprietorship in simple words is a one-man business organization. The business and the man are the same, it does not have a separate legal entity. It is the simplest form of business organizations and the ideal choice to run a small or medium scale business.
The capital required by a sole proprietorship to form business is totally arranged by the sole proprietor. Capital resources normally from saving money or by borrowing from friends, relatives or loan from bank
The owner of a sole proprietorship remains personally liable for all the business’s debts. So, if a sole proprietor business runs into financial trouble, creditors can bring lawsuits against the business owner. If such suits are successful, the owner will have to pay the business debts with his or her own money. The owner of a sole proprietorship typically signs contracts in his or her own name, because the sole proprietorship has no separate identity under the law. The sole proprietor owner will typically have customers write checks in the owner’s name, even if the business uses a fictitious name.