SP is the simplest form of legal entity, owned and operated by individuals without the need for other shareholders and directors to be involved. In the United States, SPs are typically used to run small businesses, such as individual shops and consulting companies. Since an SP does not have legal person status, the financial responsibilities of individuals and businesses are the same, which is also a drawback of an SP. Additionally, SPs do not need to file annual reports or pay annual taxes, but individual income taxes and corporate income taxes are calculated separately. In some states, non-residents can also serve as shareholders and directors of an SP, but they must meet local legal requirements.