A sole proprietorship is a business owned and run by one person. They are often small type businesses (e.g. auto repair shops, used-books stores etc.). Usually a small amount of capital is needed and the owner is entitled to all profits. The owner is also personally responsible for all debts and liabilities of business. In short, there is no distinction between the business and its owner, but the accounting records of the business activities are kept separate from the personal records of its owner.