A business owned by one person is commonly referred to as a ‘sole proprietorship’. This is the simplest form of business structure, where the owner has complete control over all aspects of the business.
In a sole proprietorship, there is no legal distinction between the owner and the business entity, meaning the owner is personally liable for any debts or obligations incurred by the business. This form of business is easy to set up and requires minimal regulatory compliance compared to other business structures, such as corporations or partnerships.
The sole proprietor earns all profits generated by the business, but they also bear all the risks and losses. Because of this, many choose to start as a sole proprietorship to keep things simple before potentially expanding or transitioning into a more complex business structure in the future.