{"id":4866,"date":"2021-09-22T13:30:03","date_gmt":"2021-09-22T18:30:03","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/smallbusiness\/incorporation-and-legal-structures\/s-corp-vs-sole-proprietorship.html"},"modified":"2025-10-13T14:30:00","modified_gmt":"2025-10-13T19:30:00","slug":"s-corp-vs-sole-proprietorship","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/smallbusiness\/incorporation-and-legal-structures\/s-corp-vs-sole-proprietorship.html","title":{"rendered":"S Corp vs. Sole Proprietorship: Critical Differences"},"content":{"rendered":"\n
\n

S Corp vs. Sole Proprietorship: Critical Differences<\/h1>\n\n
\n
\n By Tim Kelly, J.D.<\/a> | Legally reviewed by Catherine Hodder, Esq.<\/a>\n | Last updated\n
\n

Editorial Note: We earn a commission from affiliate partner links on FindLaw. Commissions do not affect the editorial integrity of our legal content.<\/p>\n\n <\/div>\n \n

\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
\n

This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

\n \n <\/i>\n Fact-Checked\n <\/summary>\n\n
\n

The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n\n\n

\n

A sole proprietorship<\/span> is a business structure<\/span> where the owner and company are the same entity, leaving personal assets<\/span> at risk. In contrast, an S corporation<\/span> is a tax election for a formal legal entity that offers personal <\/span>liability<\/span> protection<\/span> from business debts<\/span>.<\/p>\n\n <\/div>\n\n\n\n

Need help with business formation? Our trusted partner LegalZoom makes it easy\u2014packages start at $0 + state filing fees.<\/a><\/strong><\/em><\/p>\n

Key Takeaways<\/strong><\/h2>\n