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A sole proprietorship is the business organization that is regulated the least by the government due to its structure and simplicity. As a sole proprietorship is owned and operated by a single individual, there are minimal formalities and compliance requirements compared to other business entities. The owner retains full control over the business, and there is no need for a separate legal entity formation, which means that the government has less oversight regarding operations.

In contrast, other business structures, such as corporations and limited liability companies (LLCs), require registration with the state, adherence to various regulations, and compliance with detailed operational guidelines. Partnerships may involve some formal agreements and regulations but still do not reach the regulatory level imposed on corporations. Therefore, the lack of formal setup and lower compliance demands contribute to the minimal government regulation associated with sole proprietorships.