What is sole proprietership?

A sole proprietorship is a business owned by a single individual. If Bob owns 'Bob's Pizza' entirely on his own, 'Bob's Pizza' would be considered a sole proprietorship. If multiple individuals owned it, it would be a partnership. It can get a lot more complicated from there with limited liability partnerships, different types of corporations, etc., but that's the 101. While they are simple to set up, one of the biggest downsides to a sole proprietorship is that the business owner's personal assets are not shielded from legal matters that may occur at the business level. Before setting up a business, it's always good to talk to a lawyer (even a free local resource) to make sure you're setting up the right entity for your specific tax, liability, etc. circumstances.