What is the term for a business owned and operated by one person?

A business owned and operated by one person is a sole proprietorship.

In this structure, the owner and the business are generally treated as the same legal entity. The proprietor receives the profits, makes the decisions, and is responsible for the business's debts and losses. The owner may still hire employees or contractors; “sole” refers to ownership, not necessarily working alone.

Sole proprietorships are popular because they are usually simple and inexpensive to start, with fewer formal requirements than corporations. A person may also operate under a trade name rather than their personal name, depending on local rules. The trade-off is unlimited liability: personal assets may be exposed if the business cannot pay its obligations.

The term is sometimes confused with a partnership, which has two or more owners, or a corporation, which is legally separate from its owners. An individual entrepreneur can also later reorganize as a limited-liability company or corporation as the business grows.