What a sole proprietorship essentially means is that you're not choosing to form an entity. All it means is that you’re individually acting in your own name and you're carrying out business activities in your own name. If I choose to go the sole proprietorship route, I would not have the benefit of limited liability protection, either in the form of an LLC or in the corporation. A sole proprietorship can have employees, it doesn't mean it just has to be one person but typically if you are a sole proprietor and you have clients you trust and it's in an industry where the risk of lawsuits is low, then it makes sense. For instance if you are a photographer and you are carrying out all your business, all your clients, they’re was just looking for pictures from you. That's not a very high risk type of industry as opposed to something like a painting business where you could have employees up on ladders or electricians, any sort of contractor. When there's actual risk of injury, that may not be the best idea is to have a sole proprietorship if you're employing people. It would make sense for a sole proprietor to see an attorney just to have an understanding and be advised upon whether or not it makes sense to have a corporation or an LLC. At the very minimum, there should be an informed decision as to whether or not to form or not form. For more information about business law in San Diego go to PurdyBailey.com.