Forming a Sole Proprietorship

The video tutorial explains the concept of a sole proprietorship, the simplest form of business entity, which is formed by an individual engaging in business activities with the intent to make a profit. It provides an example of a leaf-raking business to illustrate how a sole proprietorship is established. The tutorial also discusses the lack of formal filing requirements, the ability to hire employees, and the transition to a partnership if profits are shared with another individual.

What is the primary requirement for forming a sole proprietorship?

• Having a business partner

• Filing a business registration form

• Incorporating the business

• Engaging in business activities with profit intent

In the example provided, what activity does Jason engage in to form a sole proprietorship?

• Providing online tutoring

• Raking leaves for a fee

• Selling homemade crafts

• Opening a coffee shop

What is NOT required to establish a sole proprietorship?

• Business activities

• A single individual

• An intent to generate revenue

• A formal business filing

Can a sole proprietorship have employees?

• Only if the employees are unpaid

• Yes, as long as there is no co-owner

• Yes, but it must become a corporation

• No, it cannot have any employees

When does a sole proprietorship transition into a partnership?

• When it reaches a certain revenue threshold

• When profits are shared with another individual

• When it files for a business license

• When it hires its first employee