Sole proprietorship

A sole proprietorship is an unincorporated business entirely owned and managed by only one individual.

A sole proprietor is fully responsible for all debts and obligations related to the business.

A creditor with a claim against a sole proprietor would normally have a right against all business and personal assets. The creditor could seize business or personal assets. This is known as unlimited liability.

Characteristics of a sole proprietorship:

• business is not incorporated
• owner has sole responsibility for decision making
• owner receives all profits and takes full responsibility for all losses
• owner is considered self-employed and reports the business income on a T1 Individual Income Tax Return

Forms and publications

• The Business Number and Your Canada Revenue Agency Program Accounts pamphlet (RC2)
• Business and Professional Income guide (T4002)
• Form RC1, Request for a Business Number (BN)

Related topics

• Business Registration Online
• Canada Business
• Related provincial and territorial government sites
• Canada's Business and Consumer Site
• Advantages and disadvantages of each ownership type