A three-part Bible and Business series on what the Bible says about the legal formation of a business.
A sole proprietor is an individual who is engaged in business activities. A sole proprietor does not register a business entity with government authorities. A sole proprietorship is the easiest business type to form because there is no legal structure. However, under current American law, a sole proprietor can be formed as a limited liability company with one member or an S-corporation with one shareholder with pass-through taxes (Leonard and Bottorff, 2022: Online). Table 3-2 outlines the pros and cons of a sole proprietor business type.
Table 3-2: Pros and Cons of Sole Proprietor Business Type (Source: Adapted from Leonard and Bottorff, 2022:[Online] and Small Business Administration, 2023:[Online])
| Pros | Cons |
| Free or low cost to form | Personally liable or all debts and risks |
| Easy to maintain | No tax benefit |
| Full owner control | Difficult to raise capital because there is no stock to sell |
| Lenders are more hesitant to lend money without a more formal business structure |
Sole Proprietorship in the Bible
While the Bible presents those in business as sole proprietors, these depictions are descriptive of what was true then and are not prescriptive to a Christian business owner today. Any teaching that a sole proprietor structure is more holy or is God’s preferred structure to conduct business is not supported in Scripture.
Some scholars have borrowed the phrase “sole proprietor” and applied it to God’s ownership and sovereignty of the universe. For example, Alter (1981:47-52) has suggested that Yahweh is the sole proprietor and master of human life. In commenting on Satan’s request to Christ that Christ bow down and worship Satan (Luke 4:1-3), Henry writes, “[Satan] demanded of [Christ] homage and adoration: If thou wilt worship me, all shall be thine, (v. 7). First, He would have him worship him himself. Perhaps he does not mean so as never to worship God, but let him worship him in conjunction with God; for the devil knows, if he can but once come in a partner, he shall soon be sole proprietor” (Henry, 1994:1836). The point is that Henry used the phrase “sole proprietor” to indicate absolute authority and sovereignty, in this case, over all that exists.
In commenting on Haggai 2:8, where God says, “The silver is mine, and the gold is mine” (The Holy Bible, 2016), Spence-Jones (1909:29) comments that God is the “sole proprietor of money.” Finney (1847:471) states that God is the “rightful and sole proprietor of the universe.” John Wesley (1872:319) agrees with Finney when Wesley asks the rhetorical question, “Is not God the sole proprietor of all things?” Wesley (1765:604) comments on Deuteronomy 5:19 (“And you shall not steal [The Holy Bible, 2016]) by saying, “Have you seriously considered, that these houses, lands, money, or goods, which you are used to call your own, are not your own, but belong to another, even God? Have you ever considered that God is the sole proprietor of heaven and earth? The true owner of everything therein? Have you considered that he has only lent them to you? That you are but a steward of your Lord’s goods?” Like Henry, Spence-Jones, and Finney, Wesley uses the phrase “sole proprietor” to indicate autonomy, full control, and sovereignty.
Stewardship Considerations of a Sole Proprietorship
The business owner using a sole proprietorship business structure should remain keenly aware of the owner’s stewardship responsibilities and opportunities before the Lord. Being a steward of all that God has entrusted to the owner in a sole proprietor structure has several advantages if the owner wants to fulfil God’s purposes for business. One advantage is that the owner is unencumbered in both power and authority to decide to use business products, services, or profits to advantage and support God’s agenda on this earth. For example, if the owner wishes to donate money to a ministry, the owner is fully empowered to take funds out of the business accounts and give that money away. The owner is not required to gain another party’s approval to make the gift.
Perhaps a second advantage is that the owner can create the type of culture God calls the owner to create for the owner’s employees. Again, there is no one to whom the owner is accountable other than the owner’s self.
A third advantage is that the owner can craft the customer base so that the owner is not supporting activities that violate the owner’s theological and religious beliefs.
Last, a sole proprietor can shut down a business more quickly than other business types, assuming the business has been managed well. For example, if God were to call the business owner to the mission field, the owner could unwind the business in relatively short order because there would be no partners, board members, shareholders, and the like, with whom the owner would need to negotiate to exist from the business.
Of course, there are temptations to sin in all ownership structures, but the sole proprietor is likely the easiest structure in which to sin. Temptations to sin include:
- Mixing personal and business budgets such that a personal expense is written off as a business expense, thus lowering one’s taxable income and thereby depriving the government of legal and rightful revenue
- Seeing oneself as the owner rather than seeing the business as an entrustment from God
Bill English, Publisher
Bible and Business
Sources:
Alter, R. 1981. The Art of Biblical Narrative. New York: Basic Books.
Finney, C.G. 1847. Lectures on Systematic Theology. New York: Clark & Austin.
Henry, M. 1994. Matthew Henry’s commentary on the whole Bible: complete and unabridged in one volume. Peabody: Hendrickson.
Leonard, K. and Bottorff, C., 2022. 6 Types of Business Ownership: Definitions, Pros & Cons. [Online]. Available from: https://www.forbes.com/advisor/business/types-business-ownership/ [Accessed 08/05/2023]
Spence-Jones, H.D.M. (Ed.) 1909. Haggai. London; New York: Funk & Wagnalls Company (The Pulpit Commentary).
The Holy Bible. 2016. English Standard Version. Wheaton, IL: Crossway Bibles.
Wesley, J. 1872. The Works of John Wesley. Third Edition. London: Wesleyan Methodist Book Room.
