What is a business owned by one person called?

A business owned by one person is referred to as a sole proprietorship. This structure is characterized by the fact that the owner has complete control over all aspects of the business and is personally liable for any debts or obligations incurred by it. It is the simplest form of business entity, making it easy to establish and operate without extensive regulatory requirements. The owner can make decisions independently and retain all profits generated by the business, which reflects the nature of sole proprietorships as individual ventures.

In contrast, a partnership involves multiple owners who share profits and responsibilities, introducing complexities related to decision-making and liability. A corporation is a separate legal entity created to conduct business, providing limited liability to its owners but requiring more formalities in terms of structure and reporting. A Limited Liability Company (LLC) combines elements from both partnerships and corporations, providing liability protection while allowing for flexible management options and tax treatment. Each of these alternatives highlights the unique characteristics of business ownership structures, underscoring why a sole proprietorship is specifically defined as a single-owner business.