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 New Hampshire (NH), a sole proprietorship is indeed the simplest business form and does not require formal registration with the state to begin operations. As a sole proprietor in NH, 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. While no formal action is required to establish a sole proprietorship, you must comply with all relevant licensing and permit requirements, which vary depending on the type of business, location, and industry. This may include obtaining a local business license, specific permits, or professional licenses necessary to operate legally. Additionally, if you choose to do business under a name other than your own, you must file a trade name with the NH Secretary of State. It's important to note that operating as a sole proprietorship does not provide any personal liability protection, as there is no legal distinction between the owner and the business.