Sole Proprietorships

Formation
No filing with the state or a local official is required.

Liability of a Participant
Owner is personally liable on any contracts or wrongful acts. Agency-principal rules apply to actions of his agents.

Control or Management
Owner has ultimate control over his business. He may hire agents who are directly under his control.

Transferability of Ownership Interest
May sell the assets of the business.

Crossing State Lines
May generally cross state lines to do business without registering in the other state.

Income Tax Status
Filed on personal Income Tax Return.