Sole proprietorship is a kind of business unit that exists in close relationship with its owner. The owner is the only or sole proprietor. He or she bears responsibility for the well-being and functioning of the business. He or she acts alone in all matters concerning the company. A sole proprietorship involves an unincorporated company. It is indicative of an individual who is willing to assume accountability for all aspects of a business. This includes both debts and profits. The debts of a sole proprietorship are the debts of the owner alone. In the context of a sole proprietorship, the proprietor must pay out of his or her own pocket for any debts. When it comes to filing income taxes, consult an attorney who specializes in the field of small businesses and knows the regulations regarding sole proprietorship.