What type of business is owned by one individual?

A sole proprietorship is a business structure where one individual owns and operates the business. This means that the single owner has full control over all decisions and is fully responsible for the profits and losses of the enterprise. This structure is often chosen for its simplicity and ease of setup; it typically requires less regulation and administrative paperwork compared to other business forms. The owner also receives all the profits directly, but at the same time, they bear all risks and liabilities associated with the business.

In contrast, a partnership involves two or more individuals sharing ownership and management responsibilities. A corporation is a separate legal entity owned by shareholders, offering limited liability protection, which is not the case in a sole proprietorship. A cooperative is a business owned and operated for the benefit of its members, who use its services, further distinguishing it from individual ownership. Each of these options reflects a different ownership structure, but the defining characteristic of a sole proprietorship is the single ownership by one individual.