A sole proprietorship is the simplest and most common structure chosen to start a business. It is an unincorporated business owned and run by one individual with no distinction between the business and you, the owner. You are entitled to all profits and are responsible for all your business’s debts, losses and liabilities.

You do not have to take any formal action to form a sole proprietorship. As long as you are the only owner, this status automatically comes from your business activities. In fact, you may already own one without knowing it. If you are a freelance writer, for example, you are a sole proprietor. But like all businesses, you need to obtain the necessary licenses and permits. Regulations vary by industry, state, and locality.

In Arizona, a sole proprietorship is indeed the simplest business structure and does not require formal registration with the state to be established. As a sole proprietor in Arizona, you are the sole owner and are personally responsible for all aspects of the business, including debts and liabilities. Profits from the business flow directly to you and are reported on your personal income tax returns. However, depending on the nature of your business, you may need to obtain relevant licenses and permits. These requirements can vary based on the type of business, location, and the specific regulations that apply to your industry. It's important to check with local city or county offices and the Arizona Department of Revenue to ensure you comply with all necessary business licensing, zoning laws, and tax requirements. Additionally, if you choose to operate under a trade name or 'Doing Business As' (DBA), you must file a trade name registration with the Arizona Secretary of State.