If you start and manage a landscaping business on your own, you have likely started a Blank______.
Multiple choice question.
corporation
franchise
sole proprietorship
partnership
The correct answer and explanation is :
The correct answer is: sole proprietorship
A sole proprietorship is the simplest and most common form of business ownership, especially for individuals starting a small business on their own—such as a landscaping business. In a sole proprietorship, the business is not a separate legal entity from the owner. This means the owner is personally responsible for all aspects of the business, including debts, liabilities, and operations.
If you start and manage a landscaping business by yourself, without formally registering as a corporation or entering into a business agreement with others, you have automatically created a sole proprietorship. No legal paperwork is required to establish one (though local permits or licenses may still be necessary), and any profits earned are reported on the owner’s personal tax return.
One major benefit of a sole proprietorship is its simplicity. It’s easy to form, has minimal regulatory burden, and allows the owner full control over decision-making. However, it also has its risks. Because there is no legal separation between the business and the owner, you are personally liable for any debts the business incurs. If someone sues your landscaping company, your personal assets—like your car, savings, or home—could be at risk.
This is different from other types of business ownership:
- A corporation is a separate legal entity from its owners and offers limited liability protection.
- A franchise is a type of business where you operate under an established brand and follow their system.
- A partnership involves two or more people sharing ownership of a business.
In conclusion, if you start and run a landscaping business by yourself, without forming a corporation or entering a partnership, you have created a sole proprietorship by default.