Proprietor Definition and Legal Meaning
On this page, you'll find the legal definition and meaning of Proprietor, written in plain English, along with examples of how it is used.
What is Proprietor?
Legal owner of anything,especially business.
History and Meaning of Proprietor
A proprietor is an individual who owns an unincorporated business by themselves. In other words, they have sole ownership of the business, meaning they are responsible for all profits and losses it incurs. Historically, the term “proprietor” has been used to describe someone who owns property or land, but it has since been adopted to describe business owners as well.
In the past, proprietorship was the most common form of business ownership. This was because it was fairly easy to start a sole proprietorship, as it didn’t require any formal incorporation or registration. However, this also meant that the proprietor was personally liable for any debts the business incurred. Today, many small businesses still operate as sole proprietorships, but larger businesses often choose to incorporate to limit their liability.
Examples of Proprietor
- John owns a small bakery in town. He is the sole proprietor of the business, meaning he is responsible for all aspects of its operation, from making the baked goods to paying rent and salaries.
- Mary runs a successful landscaping company. As a proprietor, she reaps all the benefits of her business’s success, but also bears all the risks and liabilities.
- Sam owns a small craft shop in the city center. He is responsible for ensuring that the business is profitable, managing the employees and keeping the shelves stocked with merchandise.
Legal Terms Similar to Proprietor
- Partnership: A business owned by two or more people.
- Corporation: A legal entity that is separate from its owners and is responsible for its own profits, losses, and liabilities.
- Limited liability: A legal concept that protects owners of a corporation and some other types of businesses from personal losses beyond their investment in the business.