What type of business is owned by a single individual?

A sole proprietorship is a type of business that is owned and operated by a single individual. This structure is the simplest form of business entity, allowing the owner to have full control over all aspects of the business. The owner is personally responsible for all debts and obligations of the business, which means they directly benefit from profits but also bear any losses.

In a sole proprietorship, there are minimal formalities and few regulatory requirements, making it relatively easy to establish and dissolve compared to other business structures like corporations and partnerships. Moreover, this type of business allows for simple tax reporting, as profits and losses are typically reported on the owner's personal tax return.

While other types of business ownership exist, such as partnerships where multiple individuals share ownership, corporations that are legally distinct entities owned by shareholders, and franchises which involve a licensing agreement between a franchisor and franchisee, none of these represent a business owned solely by one person. This is what distinctly defines a sole proprietorship as the correct choice.