What defines a sole proprietorship?

A sole proprietorship is defined as a business that is operated by a single individual without legal distinction between the owner and the business entity. In this structure, the owner is personally responsible for all debts and obligations incurred by the business, and there is no separation in terms of legal liability. This means that the proprietor can directly control the business, make decisions independently, and receive all profits, but they also bear all the risks and liabilities associated with the business's operations.

The other choices outline different types of business structures. For instance, a business owned by multiple individuals characterizes a partnership or corporation rather than a sole proprietorship. A corporation, which features limited liability protections, is a separate legal entity that distinguishes the owners from their personal liabilities. Lastly, a partnership involves a formal agreement between two or more individuals to share ownership and responsibilities, which contrasts with the singular ownership of a sole proprietorship. Therefore, the key attribute that highlights a sole proprietorship is its singular ownership without legal distinction, making the chosen answer accurate.