A sole proprietorship is the simplest of the business structures, it means that you are in business for yourself, having no other partners. It needs no legal forms to identify it. For tax purposes, the paperwork is generally limited. You also have unlimited liability as to your taxes and financial and legal responsibilities. This means that if the school incurs any debts, you are personally responsible for the entire amount of the debts. If you did not have enough money to pay these debts, your personal assets could be sold. The income tax rate for the sole proprietorship depends on your level of income.