A sole proprietorship is a business owned and managed by one individual, who is personally liable for all business debts and obligations and beneficiary of all its profits. For federal income tax purposes, the owner and the business are one entity. Therefore, the owner reports the profits and losses of the business on Schedule C of form 1040, the individual federal income tax return. Since the owner of a sole proprietorship is personally liable for the debts of the business and also liable for the acts of any employees of the business, it is most often not advisable to carry on a business as a sole proprietorship. Other business entitly options include business corporations, professional corporations, limited partnerships and limited liablity companies. Attorney Rubino is experienced in the operation of sole proprietorships and can guide the operation of your business in order to protect your interests and allow your business to grow.