What is a sole proprietorship?
A sole proprietorship is a business that can be owned and controlled by an individual, a company or a limited liability partnership. There are no partners in the business.
The legal status of a sole proprietorship can be defined as follows:
- It is not a separate legal entity from the business owner
- The business owner has unlimited liability (i.e. the business owner is personally liable for all the debts and losses of the sole proprietorship)
- It can sue or be sued in the owner’s name