Sole proprietorship

A sole proprietorship is a business owned and operated by a single individual, where there is no legal distinction between the owner and the business.

In Luxembourg, many small entrepreneurs start as sole proprietors due to the ease of setup and lower compliance requirements. However, this structure comes with the drawback of unlimited personal liability. As a result, some entrepreneurs may transition to limited liability structures, such as SARL, to protect personal assets while maintaining control over the business.