Sole Proprietorship

This is the simplest and most used of all business entities. It is run as the owner wants to run it. The major disadvantage is that since the business and the owner are one and the same, a lawsuit against the business imposes total liability on the owner. Also, a sole proprietor is personally liable for the acts of their employees. A large lawsuit would probably cause the owner to lose not only their business, but likely all of their personal assets as well, including their home, personal vehicles, and all other belongings. And a sole-proprietor usually pays more in taxes, since they have none of the tax saving advantages that could be available to them if they were to use another type of business entity.