Glossary
What is Sole Proprietor?
A sole proprietorship is an unincorporated business owned by one person, with no legal separation between the owner and the business. The owner reports business income on their personal tax return and is personally responsible for all business debts. Sole proprietors can obtain business financing, but lenders rely heavily on personal credit and personal tax returns. Many owners eventually form an LLC or corporation for liability protection, though personal guarantees are still commonly required.
Example
A freelance photographer operating under their own name is a sole proprietor and reports income on Schedule C.
Related funding
1099 & Gig Funding: Funding for independent contractors and owner-operators.
Related terms
Questions about an offer? Your advisor will explain every term.