The default US business structure for one person, where the business and owner are legally the same and profits are taxed as personal income.
A sole proprietor is the default setup when one person runs a business without forming a separate legal entity. You don’t file paperwork to become one — start freelancing, and you’re a sole proprietor. The business and you are legally the same: its profits are your income, and its debts are your debts.
For sellers, this is the simplest way to start: minimal cost, minimal paperwork, and you report business income on your personal tax return. The tradeoff is no liability protection — if the business is sued or owes money, your personal assets are exposed. For buyers, working with a sole proprietor is completely normal; most freelancers operate this way.
Many professionals eventually form an LLC for liability protection, or elect S-corp tax treatment once profits are high enough to justify it. When to switch depends on your income, risk, and state, so confirm the timing with a tax professional. If you’re just getting going, our guide on business licenses for freelancers covers the basics.