A sole proprietorship is a business where the individual engages in business personally, rather than by means of a separate business entity, such as a corporation. The benefit to the formation of the sole proprietorship is the avoidance of the formalities and reporting requirements associated with the formation of other business entities.
If you are the only owner, and your business is of a sort where there is little likelihood that any obligation of the business would surpass its net worth, a sole proprietorship may be right for you. However, because the major drawback to formation as a sole proprietorship is the personal liability of the owner of the business for each and every business liability, the sole proprietorship is not a practical choice for the vast majority of businesses.