In a sole proprietorship, who assumes the expenses and receives profits?

In a sole proprietorship, the individual owner is the person who assumes all expenses and receives all profits from the business. This type of business structure means that the owner has complete control over the operations and financial aspects of the business. Since there are no partners or co-owners involved, the sole proprietor is responsible for all decisions, liabilities, and income generated by the business.

This direct relationship between the owner and the business allows for straightforward tax reporting, as the profits and losses are typically reported on the owner’s personal tax return, making it a clear reflection of the owner's financial status. This aspect of sole proprietorship is one of its most distinct features, differentiating it from other business types like partnerships or corporations, where responsibilities and profits are shared among multiple entities.