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 Tennessee, a sole proprietorship is indeed the simplest business form and does not require formal registration with the state to be established. As a sole proprietor, you are personally responsible for all aspects of the business, including profits, debts, losses, and liabilities. While no specific action is required to form a sole proprietorship, you must comply with local and state business license requirements, which vary depending on the type of business, location, and other regulatory considerations. It is important to check with local city and county government offices to determine the necessary permits and licenses. Additionally, if you choose to operate under a name different from your own, you must file an assumed name, or 'Doing Business As' (DBA), with the county clerk in the county where your business is located. Sole proprietors in Tennessee are also responsible for paying state and federal taxes on business income and may be required to register for state taxes if selling goods or providing certain types of services.