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 Minnesota, 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, you are the sole owner and are personally responsible for the business's debts, losses, 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 be required to obtain specific licenses or permits. These requirements can vary based on the type of business, the products or services offered, and the location of the business. It's important to check with local city and county governments to ensure compliance with local ordinances, as well as with the Minnesota Department of Employment and Economic Development for state-level requirements. Additionally, if you choose to operate under a name different from your own, you must file an Assumed Name Certificate (also known as a DBA - 'doing business as') with the Minnesota Secretary of State.