A sole proprietorship is a tax status, not a legal entity. You create one by operating under your Social Security number or filing a DBA with the state. Terms like LLC, S corp, and partnership can mean either a legal structure or a tax classification, depending on context.
What is the difference between a legal business entity and a tax structure? This is not legal advice, just explaining some base differences. You have words you've heard of like sole proprietor, LLC, S corp, partnerships, C corporations, nonprofits, trusts. These are all names that reference sometimes a legal entity, sometimes a tax structure, sometimes both. Some basics. A sole proprietorship is not a separate legal entity. This is created either by not doing anything and using your Social Security number to operate your business, or by getting a DBA, a Doing Business As, which is a legal phrase that you would set up with your state. A sole proprietor is a tax status, which means you're basically going to be taxed the worst way possible.
