Sole Proprietorship Examples: 20 Businesses Run by One Person

At FreelanceAtlas, we help freelancers set up the business side of their work without paying for structure they do not need yet. This guide builds on Sole Proprietor vs LLC for Freelancers: Which Business Structure Do You Actually Need? and EIN for Sole Proprietors: When Freelancers Need One and How to Apply.

20 Sole Proprietorship Examples and What Each One Needs

Every business below can run as a sole proprietorship. Most need a city or county business license where the city requires one, so the middle column lists only what to check beyond that. The last column is the kind of claim that could reach your personal savings, which matters when you weigh an LLC.

What Makes a Business a Sole Proprietorship

The IRS sole proprietorships page defines a sole proprietor as “someone who owns an unincorporated business by themselves.” The SBA’s business structure guide adds that you are “automatically considered to be a sole proprietorship if you do business activities” without registering as another type of business. No filing creates it. The day a dog walker takes a first paid booking, the business exists.

The same SBA page says the owner “can be held personally liable for the debts and obligations of the business.” In law, you and the business are one person. A single-member LLC sits in between: the IRS LLC page says an LLC with one member “is treated as an entity disregarded as separate from its owner” for income tax, so by default it files the same tax forms. Under state law, though, it is a separate entity from you.

How a Sole Proprietorship Is Taxed by Default

A one-person business with no staff usually files three federal forms:

• Schedule C (Form 1040). Income minus business expenses equals net profit. Our Schedule C Instructions for Freelancers go through it line by line.
• Schedule SE. IRS Topic 554 says you usually pay self-employment tax “if you had net earnings from self-employment of $400 or more.” The rate is 12.4 percent for Social Security plus 2.9 percent for Medicare, on 92.35 percent of net earnings.
• Form 1040-ES. The IRS estimated taxes page says sole proprietors generally pay quarterly “if they expect to owe tax of $1,000 or more when their return is filed.”

Say the dog walker takes in $30,000 in a year and spends $3,000 on insurance and mileage. Profit is $27,000. Self-employment tax is $27,000 x 92.35 percent = $24,935, times 15.3 percent, or $3,815. Half of that, about $1,907, is deductible when figuring adjusted gross income. Our self-employment tax calculator runs the same math on your own profit.

The IRS Form 1099-NEC FAQ sets the client reporting threshold at “$2,000 for payments made after December 31, 2025.” Payment apps send a Form 1099-K when payments exceed $20,000 in more than 200 transactions. Either way, the IRS Form 1099-K page says “you must still report any income on your tax return.”

How a Sole Proprietorship Is Registered by Default

If you work under your own legal name, the SBA’s registration guide says a sole proprietor does not need to register at the state level. What may still apply:

• A DBA. Trading as “Northside Dog Walking” instead of your own name is a DBA, and the SBA says “most states require you to register your DBA if you use one.”
• Licenses. The SBA says “The licenses and permits you need from the state, county, or city will depend on your business activities and business location.” Hairstylists and real estate agents cannot take paid work without a state license.
• A sales tax permit. Sellers of goods register with the state revenue department where the state requires it.
• An EIN, sometimes. You need one to hire employees. Without staff you can use your Social Security number, though many freelancers get a free EIN to keep it off client W-9 forms.

How a Sole Proprietor Pays Themselves

There is no payroll for the owner. You move money from the business account to your personal account as an owner’s draw, in any amount and on any day. A draw is not a business expense and is not taxed when you take it. Tax is figured on Schedule C profit, so a photographer with $50,000 of profit owes tax on $50,000 whether she drew $20,000 or all of it.

A simple routine: move a tax share of each payment into savings first (How Much to Set Aside for Taxes on 1099 Income in 2026 shows how to pick it), keep one or two months of costs in the business account, then draw a fixed amount on the same date each month. How to Pay Yourself as a Freelancer or LLC Owner: Draws vs Salary has the full method.

When to Move From a Sole Proprietorship to an LLC

Many of the 20 businesses above never need an LLC. These signs suggest yours might:

• Your work can hurt people or property. Look at the dog walker and handyman rows. The SBA says LLCs protect owners “in most instances,” so the protection has limits, and liability insurance is what pays a claim. Business Insurance for Freelancers matches policies to risks.
• You sign leases, loans or large contracts. Signing as an LLC keeps the business’s promises separate from yours.
• You hire help. Employees and subcontractors bring new kinds of claims.
• Profit is high enough for an S corp election. That needs an entity first, as S Corp vs LLC: Which One a Freelancer Needs explains.

An LLC has costs. In New York, the Department of State charges $200 to file Articles of Organization, and most new LLCs must also publish a notice in two newspapers for six consecutive weeks. Best State to Form an LLC for Freelancers explains why your home state is usually the right one. Your federal tax does not change unless you elect corporate treatment.

Conclusion

A sole proprietorship is any business one person owns without forming an LLC or corporation, from a freelance designer to a dog walker. Nothing is filed to create one. The owner reports profit on Schedule C and pays self-employment tax once net earnings reach $400, and the only registrations are a DBA for a trade name plus whatever licenses the work requires.

Check the table row for your kind of work, then set up a separate bank account and a monthly owner’s draw. Move to an LLC when your work can injure people or damage property, when you sign large contracts, or when profit justifies an S corp election. For your first bill, our invoice generator works under your own name or a DBA.

Key Takeaways

• A sole proprietor is “someone who owns an unincorporated business by themselves,” and no filing creates one.
• All 20 examples file Schedule C and pay self-employment tax of 15.3 percent on 92.35 percent of profit once net earnings reach $400.
• A dog walker with $27,000 of profit owes about $3,815 in self-employment tax and deducts about $1,907 of it.
• Clients file Form 1099-NEC for payments of $2,000 or more made after December 31, 2025, and you report all income with or without one.
• Under your own name you register nothing with the state, but a DBA, a local license or a state occupational license may apply.
• A New York LLC costs $200 to file plus a newspaper notice that runs for six weeks.

Frequently Asked Questions

What is an example of a sole proprietorship?

A freelance graphic designer who works under her own name and has not formed an LLC is a sole proprietorship. So is a dog walker, tutor or rideshare driver in the same position. Each reports profit on Schedule C and pays self-employment tax once net earnings reach $400.

Is Amazon a sole proprietor?

No. Amazon.com, Inc. is a corporation owned by shareholders, and its annual report on Form 10-K for 2010 says it “was incorporated in 1994 in the state of Washington and reincorporated in 1996 in the state of Delaware.” Its filings describe a corporation from 1994 onward, not a business one person owns under their own name.

What is the most successful sole proprietorship?

There is no public ranking, because sole proprietors report their numbers on private tax returns. The IRS publishes totals instead: its Spring 2025 Statistics of Income Bulletin counts 31.0 million returns with sole proprietorship activity for tax year 2022, with total profits of $410.7 billion. Businesses that grow large usually become corporations.

How do I pay myself in a sole proprietorship?

You take an owner’s draw, a transfer from the business account to your personal account. There is no payroll for the owner, and the draw is not taxed when you take it. You pay income tax and self-employment tax on the year’s Schedule C profit, whatever amount you drew.

Is a single-member LLC a sole proprietorship?

Under state law, no: the LLC is a separate entity, which is where its liability protection comes from. For income tax, the IRS treats a one-member LLC as “disregarded as separate from its owner” by default, so the owner still files Schedule C and Schedule SE like a sole proprietor.