What is a proprietorship?

A proprietorship is defined as a business entity that is owned and operated by a single individual. This type of business structure allows the owner to have complete control over business decisions and operations. The simplicity of a proprietorship makes it an attractive option for many small business owners, as there are fewer regulatory requirements, and the tax implications can be straightforward, with the business income being reported as personal income on the owner's tax return.

In contrast, a corporate entity with multiple shareholders represents a different structure entirely, where ownership is divided among multiple individuals or entities and is subject to different regulatory frameworks. A partnership formed for investing involves at least two individuals collaborating as co-owners, which differs fundamentally from the singular ownership nature of a proprietorship. Lastly, a governmental organization serves public administrative functions and does not operate for profit, setting it apart from the profit-driven motivation typical of a proprietorship.