What is a Proprietor?

Definition: A proprietor is an individual who owns a business establishment or sole proprietorship. This person has legal use of the assets and their operations.

What Does Proprietor Mean?

What is the definition of proprietor? In business, the term proprietor comes from the sole proprietorship business entity type. This form of company is unincorporated and only has one owner, the sole proprietor.

Although this type of entity is easy to setup and operate, it isn’t preferred for most businesses because it doesn’t provide any liability protection. All of the income and losses are attached to the owner, personally. Thus, if a customer sues the company, he can affectively sue the owner for his personal assets.

This term is also used when it comes to technology, processes, and software. If a company develops a patented process to produce its goods more efficiently than its competitors, its process is considered proprietary because no other company can use it. The originating company is the owner of this process.

Let’s look at an example.


Patrick is a highly skilled dentist with several years of experience. He has been working for a clinic for the past 5 years and he just recently started his own practice. He never incorporated or formalized a business entity when he went out on his own. He just started working for himself. This is an example of a sole prop. Patrick is the company and the company is Patrick. There are no legal distinctions between the two entities. Patrick didn’t have to do anything special to set up his proprietorship. He just had to start his business activities.

After six months of business, he decided to consult with an attorney to see if he set up his company properly. Patrick’s attorney told him that he was exposing himself to a lot of risk being a sole proprietor and suggested that he formed a medical corporation.

Summary Definition

Define Proprietorship: Proprietor means an owner of a business.

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