Which type of business is owned solely by one individual?

A sole proprietorship is defined as a type of business that is owned and operated by a single individual. This structure allows the owner complete control over the business decisions and operations, and they also receive all the profits generated. In this arrangement, there is no legal distinction between the owner and the business entity, which means that the owner is personally liable for any debts or obligations incurred by the business.

This form of business is particularly popular among small business owners due to its simplicity and ease of setup, as it does not require formal incorporation or complex regulatory compliance. Unlike a partnership, where multiple individuals share ownership, or a corporation, which is a separate legal entity from its owners, the sole proprietorship is straightforward, making it an ideal choice for many entrepreneurs looking to start their own business on a small scale.

In contrast, partnerships involve two or more individuals sharing ownership responsibilities, and corporations have a more complex structure with distinct legal personhood. Nonprofit organizations serve different purposes, typically focusing on social causes rather than profit generation. Thus, the sole proprietorship stands out as the option best representing a business owned solely by one individual.