Why do people start their businesses as sole proprietorships?
I believe that people start their businesses as a sole proprietorship because a sole proprietorship can be formed easily, quickly, and with little cost.
Further, it is likely that the sole proprietor can also register the company as a limited liability company, or LLC. This process is often done online with the proprietor's state of residence. The fee to originate the LLC status and the annual renewal fee vary from state to state.
If you are planning to form a company, you should seek professional advice as to which structure will best serve your needs.