Final answer:
A sole proprietorship is a business owned by one person, responsible for all profits and losses, with simplicity in management but without limited liability protection.
Explanation:
A sole proprietorship is a business owned and run by one person. The owner is responsible for all profits and losses. For example, a local bakery owned by an individual is a sole proprietorship.
A sole proprietorship offers simplicity in terms of management and decision-making to the owner, who retains all profits generated by the business but also bears all risks and liabilities.
In contrast to a limited liability company or a corporation, a sole proprietorship does not provide the owner with limited liability protection against business debts and losses.
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