Sole Proprietorship is a one-person business who possesses, manages and controls the business. While merchandising tax and legal liabilities of the owner and the business are one and the same. The proprietorship is not taxed as separate entity. Proprietor must remind that the earnings of the business are taxed at the individual level, which means no separate filing of income tax returns for their business. There is no vehicle for protecting proprietor's income. In proprietorship the individual's assets being covered as business holdings. Therefore, legal claimants can pursue the personal property of the proprietor and not simply the assets used in the business.
