Sole Proprietorship (Sole Prop) - ENGAGE CPAs

A sole proprietorship or sole prop is the default designation for a business once it starts collecting money from customers. If you register nothing with the IRS, nothing with your state, form no official legal entity and have only one owner, you're a sole prop, by default.
A sole prop is a disregarded entity in the eyes of the IRS, which means that the IRS sees no difference between John Smith earning $50,000 of self-employment income from cutting lawns and John Total Landscaping LLC earning $50,000. A sole proprietorship's income (not owner draws) will be taxed at ordinary income tax rates plus self-employment tax rates, on the owner's personal tax return (Form 1040).
When registering for bank accounts and credit cards, all of those accounts will be created using your social security number. It is against the rules to pay yourself, as the owner, payroll from a sole proprietorship, but you are allowed to pay employees via payroll. However, the downside, like the credit cards and bank accounts is that you'll also have to use your social security number as the employer identification number, so your employees will get W-2s with your social on them.
Regardless of the business, amount of revenue, type of industry, personal identity security, is one of the main reasons business owners decide to set up business entities so that they don't have to share their social with employees and vendors and they can register for an employer identification number (EIN) with the IRS.