A proprietorship is the easiest business entity to form. The two principal advantages of this type of organizational structure are that the income derived from the business is taxed only one time as personal income, and there are no formal business formalities such as required directors and annual meetings that are required under certain corporate structures.

The primary disadvantage is the issue of unlimited liability for the proprietor. The corporate shield that protects individual investor's personal wealth from debts and judgments against the firm is not available for the sole proprietor.