Ask The Boss Lady’s Lawyer: What is a sole proprietorship?

A sole proprietorship, which I will refer to as a “sole prop,” is an unincorporated business, which means you didn’t file any paperwork with the secretary of state, and you don’t have a separate taxpayer ID number (akin to a social security number for a business). Any income that you make in carrying on the business is reported with your personal social security number. You don’t have an operating agreement or a shareholder agreement. You might use a “DBA” – a “doing business as” for marketing purposes, but it’s still you running the show and reporting the profits received.