What do you call a business that is owned by a single individual?

A business owned by a single individual is referred to as a sole proprietorship. This structure is one of the simplest and most common forms of business organization. It allows a single person to own and operate a business without the legal complexities that come with other types of business entities.

In a sole proprietorship, the owner has complete control over all decisions and retains all profits, but they also bear unlimited liability for any debts or obligations incurred by the business. This means that the individual’s personal assets can be at risk if the business faces financial difficulties.

The other options represent different business structures. Partnerships involve two or more individuals who share ownership and responsibilities. Corporations are more complex entities that exist separately from their owners, offering limited liability protection but requiring more regulations and formalities. An LLC, or limited liability company, combines aspects of partnerships and corporations, providing liability protection while allowing for pass-through taxation. Understanding these distinctions is essential for making informed decisions about business ownership.