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 Jersey, a sole proprietorship is indeed the simplest business form and is automatically established when an individual begins business activities without registering as any other type of business entity. As a sole proprietor in New Jersey, you are not required to file any formation documents with the state to start your business. However, you are personally liable for all debts and obligations of the business, and there is no legal separation between you and your business. It's important to note that while no formal action is required to establish a sole proprietorship, you must comply with all relevant licensing, permit, and tax requirements. This includes obtaining any necessary local or state business licenses, permits specific to your industry, and registering for state taxes. Sole proprietors in New Jersey may also need to register a trade name or 'Doing Business As' (DBA) with the county clerk in the county where the business is located if they operate under a name other than their legal name.