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Sole Proprietorship

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Sole Proprietorship

 

In General: This is the simplest form of business. A sole proprietorship is not a separate entity itself. Rather, a sole proprietor directly owns the business and is directly responsible for its debts.

 

Unlimited Personal Liability for Loss: In a sole proprietorship, the owner is personally liable for the company, thus placing his or her entire personal assets and wealth at risk. If an owner is married, that owner puts the community property at risk as well.

 

Management and Control: The owner (sole proprietor) has total management and control over the company. However, the price for total management and control is that the owner is at risk for personal liability incurred through the acts of the owner’s agents or employees.

 

No Formalities: With the exception of complying with any applicable licensing requirements, there are no formalities required of a sole proprietorship. Note, however, where the business is conducted under a name which does not show the owner’s surname or implies the existence of additional owners, California, for example, requires that the owner file a fictitious business name statement and publish notice.

 

Transferability: The owner can sell the business as he or she pleases.

 

Duration: The sole proprietorship remains in existence for as long as the owner is willing or able to stay in business

 

General Info:

source: http://en.wikipedia.org/wiki/Sole_Proprietorship

 

A sole proprietorship is a business which legally has no separate existence from its owner. Hence, the limitations of liability enjoyed by a corporation and limited liability partnerships do not apply to sole proprietors. All debts of the business are debts of the owner. It is a "sole" proprietor in the sense that the owner has no partners. A sole proprietorship essentially means a person does business in their own name and there is only one owner. A sole proprietorship is not a corporation, it does not pay corporate taxes, but rather the person who organized the business pays personal income taxes on the profits made, making accounting much simpler. A sole proprietorship need not worry about double taxation like a corporate entity would have to.

 

Most sole proprietors will register a trade name or "Doing Business As". This allows the proprietor to do business with a name other than their legal name and also allows them to open a business account with banking institutions.

 

A sole proprietorship is a business which legally has no separate existence from its owner. Hence, the limitations of liability enjoyed by a corporation and limited liability partnerships do not apply to sole proprietors. All debts of the business are debts of the owner. It is a "sole" proprietor in the sense that the owner has no partners. A sole proprietorship essentially means a person does business in their own name and there is only one owner. A sole proprietorship is not a corporation, it does not pay corporate taxes, but rather the person who organized the business pays personal income taxes on the profits made, making accounting much simpler. A sole proprietorship need not worry about double taxation like a corporate entity would have to.

 

Most sole proprietors will register a trade name or "Doing Business As". This allows the proprietor to do business with a name other than their legal name and also allows them to open a business account with banking institutions.

 

 

Books about starting a business

 

 

 

 

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