What best defines an individual proprietorship?

An individual proprietorship is best defined as a business owned and operated by one individual. This means that the individual has full control over the business operations, makes all decisions, and receives all profits. In this structure, there is no legal distinction between the owner and the business, leading to unlimited liability, where the owner is personally responsible for all debts and liabilities of the business. This format is commonly used by solo entrepreneurs as it is straightforward to set up and manage, often requiring minimal regulatory compliance compared to other business structures.

Other types of business ownership mentioned in the options illustrate different structures: for instance, a business owned by two or more individuals describes a partnership; a corporation indicates a more complex business organization with shareholders and separate legal status; and a cooperative involves collective ownership by members for mutual benefit. Each of these structures has its unique characteristics, benefits, and liabilities that differentiate them from an individual proprietorship.