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 North Dakota, 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, the individual owner is personally responsible for all aspects of the business, including debts and liabilities. The owner and the business are considered a single entity for tax and liability purposes. While no formal action is required to form a sole proprietorship, the owner must secure all necessary licenses and permits relevant to the type of business being conducted. These requirements can vary depending on the specific industry, as well as state and local regulations. It is important for sole proprietors in North Dakota to check with their local city and county government to ensure they comply with all business licensing and permit requirements. Additionally, if the sole proprietorship operates under a name different from the owner's legal name, a 'Doing Business As' (DBA) registration, also known as a trade name, must be filed with the county recorder where the business is located.