The Sole Proprietor The term “Sole Proprietor” is the purest and simplest definition of the situation of someone being in business for one’s self. In Canada, a Sole Proprietor is the simplest form of doing business. It is so simple in fact that in many situations you do not need to register the business. In this type of business format there is no separation between the “business” and the person running the business. One way to look at sole proprietorship is that when you get up in the morning the business is open. The Sole Proprietor format is not a great format for being a professional contractor and most accountants would point you in the incorporation direction. On the plus side you can have business expenses and you can run a profit or a loss and there is a simplified reporting process since all the “revenue” is considered personal income. The down side is that the profit and losses are dealt with at the personal marginal tax rates and you personally are liable for all claims against your business. The ideal business for the sole proprietor is in the trades, such as professional roofing, plumbing, and so on. Trades people may work for any number of companies and they run their own hours on projects. They may or may not have helpers, but once the Sole Proprietor stops working there is no business. You cannot sell a sole proprietorship as the entity is tied to the Sole Proprietor. The “business” still needs to operate in many ways like any other business. You would still need to remit invoices to clients, charge GST, have WCB and liability insurance. You can run the business under a trade name which can be registered. There is substantial information on sole proprietorships on the www.strategis.gc.ca website. However, if you are serious about running a business—incorporate.