What is a key characteristic of a sole proprietorship?

A sole proprietorship is defined by its simplicity and lack of formal structure. This type of business entity is owned and operated by a single individual, which means that it does not require any formal incorporation or registration process beyond the standard business licenses that may be required at the local level. The absence of a formal structure allows the owner to have complete control over the business decisions and operations without the complex compliance and regulatory requirements that corporations face.

The other characteristics noted in the other options do not apply to sole proprietorships. The option mentioning multiple owners refers to partnerships or corporations, which inherently have more than one owner. The designation of being a corporation involves a legal structure that provides certain benefits which a sole proprietorship does not possess. Lastly, sole proprietorships do not have limited liability; instead, the owner is personally liable for all debts and obligations of the business, meaning that personal assets could be at risk.