What type of business structure is a proprietorship?

A proprietorship, often referred to as a sole proprietorship, is characterized as a business that is owned and operated by a single individual. This structure is straightforward and does not require formal incorporation, making it one of the most common types of business ownership. The owner has full control over all decision-making processes and is responsible for all liabilities incurred by the business.

This business structure is favored by many entrepreneurs due to its simplicity, ease of setup, and direct claim to all profits generated. In a proprietorship, the owner also faces few regulatory requirements compared to other business forms, such as corporations or partnerships, making it accessible for individuals starting small businesses.

The other options describe different business structures. A partnership involves multiple individuals sharing ownership and operational responsibility, while a corporation denotes a structured entity owned by shareholders. A franchise, on the other hand, involves the rights to operate a business under a recognized brand, which is unrelated to the sole ownership aspect of a proprietorship. Therefore, the definition and characteristics of a proprietorship align specifically with the concept of being controlled and operated by one person.