Which of the following is an implication of being a Sole Proprietor?

Being a Sole Proprietor simplifies the tax filing process significantly. A Sole Proprietorship is not considered a separate legal entity from its owner, which means that the income from the business is reported directly on the owner's personal tax return. This results in less complexity compared to other business structures like corporations or partnerships, where separate tax returns are often required.

Consequently, the Sole Proprietor typically uses a Schedule C form to report income and expenses, streamlining the filing process. This ease of tax reporting is one of the key advantages of choosing this business structure, making it appealing for individuals starting their own business.

In comparison, other options involve different situations. For example, limited liability protection is typically associated with corporations or limited liability companies, not Sole Proprietorships. The requirement for annual reports is also more common in corporation structures that need to maintain compliance with state regulations, whereas Sole Proprietorships usually do not have such requirements. Access to unlimited capital is generally more associated with large corporations able to attract investors, rather than a Sole Proprietor who may rely more on personal funds or loans.