{"id":264293,"date":"2023-07-03T12:59:18","date_gmt":"2023-07-03T00:59:18","guid":{"rendered":"https:\/\/www.reckon.com\/nz\/?page_id=264293"},"modified":"2026-03-03T12:54:34","modified_gmt":"2026-03-02T23:54:34","slug":"sole-proprietorship","status":"publish","type":"glo","link":"https:\/\/www.reckon.com\/nz\/glossary\/sole-proprietorship\/","title":{"rendered":"Sole Proprietorship"},"content":{"rendered":"

[et_pb_section fb_built=”1″ custom_padding_last_edited=”off|desktop” _builder_version=”4.27.2″ custom_margin=”0px||0px||false|false” custom_padding=”0px||0px||false|false” custom_padding_phone=”0px||||false|false” da_disable_devices=”off|off|off” locked=”off” global_colors_info=”{}” da_is_popup=”off” da_exit_intent=”off” da_has_close=”on” da_alt_close=”off” da_dark_close=”off” da_not_modal=”on” da_is_singular=”off” da_with_loader=”off” da_has_shadow=”on”][et_pb_row column_structure=”1_3,2_3″ _builder_version=”4.27.2″ background_size=”initial” background_position=”top_left” background_repeat=”repeat” width=”100%” custom_margin=”0px||0px||false|false” custom_padding=”0px||0px||false|false” global_colors_info=”{}”][et_pb_column type=”1_3″ module_class=”table-contents” _builder_version=”4.23″ background_color=”#f4f4f4″ custom_padding=”25px||25px||true|false” sticky_position=”top” sticky_limit_bottom=”section” sticky_position_tablet=”top” sticky_position_phone=”none” sticky_position_last_edited=”on|desktop” border_radii=”on|24px|24px|24px|24px” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_text _builder_version=”4.23″ text_font=”||||||||” global_colors_info=”{}” background__hover_enabled=”on|desktop”][\/et_pb_text][\/et_pb_column][et_pb_column type=”2_3″ _builder_version=”4.16″ custom_padding=”|||” global_colors_info=”{}” custom_padding__hover=”|||”][et_pb_text admin_label=”Definition description” _builder_version=”4.27.5″ header_2_font_size=”32px” header_2_font_size_tablet=”30px” header_2_font_size_phone=”26px” header_2_font_size_last_edited=”on|tablet” global_colors_info=”{}”]<\/p>\n

A sole proprietorship is another term for a sole trader business. A sole proprietorship refers to an unincorporated business with a single business owner who pays personal income tax on their earnings.<\/p>\n

Being the simplest form of business ownership, most businesses will start as sole proprietorships\u2014and many remain sole traders for the life of their business<\/a>.<\/p>\n

[\/et_pb_text][et_pb_image src=”https:\/\/www.reckon.com\/nz\/wp-content\/uploads\/2024\/08\/sole_proprietorship_definition_01.png” alt=”Sole Proprietorship Definition” title_text=”Sole Proprietorship Definition 01″ align=”center” admin_label=”Image” _builder_version=”4.27.0″ _module_preset=”default” global_colors_info=”{}”][\/et_pb_image][et_pb_text admin_label=”Definition description + related terms” _builder_version=”4.27.5″ header_2_font_size=”32px” header_2_font_size_tablet=”30px” header_2_font_size_phone=”26px” header_2_font_size_last_edited=”on|tablet” global_colors_info=”{}”]<\/p>\n

Sole proprietorships in Australia<\/h2>\n

In Australia, the term \u2018sole proprietorship\u2019 is not commonly used. In fact, you\u2019ll find that the ATO will officially refer to a sole proprietor almost exclusively as a sole trader<\/em>.<\/p>\n

Other types of business structures in Australia include companies, partnerships, and trusts.<\/p>\n

How do sole proprietorships work?<\/h2>\n

A sole proprietorship is the simplest form of business structure to operate and set up. With a basic structure and a singular owner, this type of business is one of the most popular ways to start up a small business, become a contractor, or a freelancer.<\/p>\n

In a sole proprietorship, the business owner takes on all obligations, debts, and responsibilities, so is therefore personally liable for paying individual income taxes.<\/p>\n

If a sole proprietor incurs debts, then the owner’s personal assets are at stake. On the other hand, a company is a separate legal entity.<\/p>\n

 <\/p>\n

See related terms<\/strong>
What is a ledger?<\/a>
What is working capital?<\/a>
What does accrued mean?<\/a><\/p>\n

 <\/p>\n

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A sole proprietorship is another term for a sole trader business. A sole proprietorship refers to an unincorporated business with a single business owner who pays personal income tax on their earnings. Being the simplest form of business ownership, most businesses will start as sole proprietorships\u2014and many remain sole traders for the life of their […]<\/p>\n","protected":false},"author":6,"featured_media":0,"menu_order":0,"template":"","meta":{"_et_pb_use_builder":"on","_et_pb_old_content":"","_et_gb_content_width":"","inline_featured_image":false,"_lmt_disableupdate":"no","_lmt_disable":"","footnotes":""},"class_list":["post-264293","glo","type-glo","status-publish","hentry"],"yoast_head":"\nSole Proprietorship Definition | Small Business Resources | Reckon NZ<\/title>\n<meta name=\"description\" content=\"Learn the definition of a sole proprietorship and how they work.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.reckon.com\/nz\/glossary\/sole-proprietorship\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" 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