Characteristics of a Sole Proprietor or SP:
- Does not require any formality to be formed.
- All profits and losses belong to the owner.
- The owner has unlimited liability and is liable for all debts and obligations.
- Depending on the activity or type of business, a business license or certificate may be required by the local authority to operate, or to be able to use a fictitious name.
- Generally, the Sole Proprietor limits his liability by purchasing liability insurance.