You may have been an entrepreneur since you were a kid. Your first lemonade stand was the biggest hit in the neighborhood. You were probably a sole proprietor then. Now that you’re older, you’re considering what type of business entity to form.
A sole proprietorship is the easiest business entity to form. If you are an unincorporated business and you own and completely control the business, then you may already be a sole proprietor.
The setup is informal and the startup costs are minimal (read: nil). You are taxed at one level, instead of two levels as a corporation. You also will face difficulty raising money from investors. Finally, beware: as a sole proprietor, you are liable for all obligations of the business. If you get sued, your personal assets may be within grasp of those suing you. If you lose big in court, you might get handed lemons too sour to turn into sweet, sweet lemonade.
(photo courtesy of: http://flic.kr/p/8AGhGM)