The simplest business structure is the sole proprietorship. This type of business is typically a mom-and-pop operation. No forms are required to be filed with the state. Often, the most an owner will do is file an assumed name certificate. The owner of the business is the president, treasurer, and janitor.
The downside to being a sole proprietor is the lack of personal liability protection and the is a limited amount of growth potential for the business. When a successful sole proprietorship business owner begins hiring employees or contractors, the owner should definitely consider a formalized entity structure, which will provide superior liability protection.