Which term describes a business owned and run by a single individual?

• A. Sole Proprietorship
• B. Partnership
• C. Corporation
• D. LLC

Answer: (A)

This describes a simple, single-owner business setup where there’s no legal separation between the owner and the business. The owner makes all decisions, enjoys all profits, and is personally responsible for all debts, which makes it the most straightforward form to start and operate.

That single-owner, unincorporated arrangement is what people mean by a sole proprietorship. It’s different from partnerships, which involve two or more owners; corporations, which are separate legal entities owned by shareholders; and LLCs, which are also separate entities but can be owned by one person and provide liability protection. The phrase in the question points to the lone-owner structure characteristic of a sole proprietorship.