Which agency ownership model features no legal distinction between the owner and the business entity?

The sole proprietorship is characterized by the absence of a legal distinction between the owner and the business entity. This means that the owner personally owns all the assets and is responsible for all the liabilities associated with the business. In this model, the business income is reported on the owner's personal tax return, simplifying tax responsibilities but also exposing the owner to unlimited personal liability for any debts or legal issues that arise from the business.

In contrast, other ownership models create some form of legal separation between the owner and the business. For instance, partnerships share ownership among multiple individuals who may be personally liable depending on the partnership structure, while corporations and limited liability companies (LLCs) provide limited liability protections that shield owners from personal liability for the business's debts and actions. Thus, understanding these distinctions is crucial for recognizing the implications of business ownership and liability.