What defines a "Sole Proprietor"?

A "Sole Proprietor" is defined as a licensed individual who operates a business independently without having any employees. This structure allows a single individual to own and manage the business, making all decisions and assuming full responsibility for its debts and liabilities. The essence of being a sole proprietor lies in the simplicity and direct ownership of the business, as the owner is solely responsible for all aspects, including profits and losses.

The emphasis on not having employees is crucial, as the sole proprietorship cannot include hired staff for its classification; if it did, it would change the business structure into a different entity type. This definition highlights the autonomy of the sole proprietor in managing their business without the complexities of partnerships or corporate structures, which would involve additional legal considerations and shared responsibilities.