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 South Dakota, a sole proprietorship is indeed the simplest business structure and does not require formal registration to establish. As a sole proprietor, you are automatically considered as such when you engage in business activities without registering as any other type of business entity. However, you are personally liable for all debts, losses, and liabilities incurred by the business. It's important to note that while no formal action is required to start a sole proprietorship, you must comply with state and local licensing and permit requirements, which vary depending on the type of business, location, and industry. For instance, if you're a freelance writer in South Dakota, you're operating as a sole proprietor by default. To ensure compliance with all regulations, it's advisable to check with local government offices or an attorney to understand the specific licenses and permits needed for your business operations.