What type of business structure is formed when an individual conducts business without creating a separate organizational entity?

A sole proprietorship is a business structure where an individual operates a business without establishing a separate legal entity. This means that the owner and the business are considered one and the same for legal and tax purposes. The sole proprietor has complete control over the business decisions and is personally responsible for all liabilities and debts incurred.

In a sole proprietorship, there is minimal formal structure required to set up, which makes it a popular choice for many small business owners. The income generated by the business is typically taxed as personal income on the owner's tax return, simplifying the tax process. Unlike a corporation or a limited company, there is no distinction between the business and its owner in terms of liability, governance, and taxation.

This straightforward structure allows for ease in starting and running a business; however, it also comes with the risk of personal liability for business debts and obligations, highlighting the importance of considering personal assets when making that choice.