A Sole Proprietorship

| A sole proprietorship is easy to create; there is minimal creation cost and time.The single owner has autonomy in decision making; sole owner makes all decisions related to the business and has complete ownership of business’s finances.

Sole trader is where a business is run as an individual; so that all profits are their own after tax has been paid on them. Within a sole trader organisation it is possible to employ staff, as the sole trader only means that you own the business personally and do not actually have to work by yourself.

There are three types of business entities: sole proprietorship, partnerships, and corporations. Sole proprietorships are businesses owned by an individual person. They are easy to form, but are not taxed. Instead the individual business owner is taxed on any monies acquired on behalf of the business (Kubasek, 2012. Partnerships are businesses that are owned by more than one individual owners. The big thing about partnerships is that each partner is personally responsible for the acts of the other partners in the business . (Kubasek, 2012 Corporations are businesses owned by multiple people to include shareholders (Kubasek, 2012). They can sue and be sued and are subject to a host of rules and regulations set forth by the government.

Sole proprietorships are the most common type of business in the U.S. They are most commonly chosen because they are the easiest type of business to set up and give the sole owner of the company complete control of the company. There are many benefits to a sole proprietorship in regards to control, profit retention, and convenience.

15. (TCO 4) A limited liability company has which of the following advantages? (Select all that apply.)

Sole Proprietorship Sole proprietorship is the most common form of business in the United States. It is a relatively simple way for an individual to start a business since legal costs and business requirements are minimal, and the owner has complete control over the business. Though a sole proprietor is not responsible for any corporate tax payments, the owner is responsible for taxes incurred on the income generated from the business as part of his or her personal income tax payments, and personally shoulders any other risks or obligations. A sole proprietor may also choose to file their business under a fictitious business name or a DBA (doing business as), allowing him or her to operate and market the business under a more typical

Sole proprietorship: Is the simplest and most common business structure. There is no legal distinction between the proprietor and the business, which means it is autonomous. You are entitled to all profits and responsible for all your business's losses and liabilities.

SOLE PROPRIETORSHIP: Has only one owner. Easy to start up. Some of the advantages are: owners may do whatever they want to with the business and if they want to go on vacation they can. One of the disadvantages they cannot bring in another person to help run the business. This business form is particularly common.

A sole proprietorship is a form of business that is owned by a single individual.  • Liability – Due to the lack of legal distinction between the owner and the business, the owner is fully responsible and liable for all debts that the business incurs in the same manner that an individual is fully responsible and liable for all debts that they incur. There is no legal distinction between the assets of the owner of the sole proprietorship and the business; this means that creditors have the ability to come after the owner’s business and personal material assets.   Income Taxes – Since the business is the same as the owner of the sole proprietorship, all profits or losses from the business are filed by the

INCOME TAXES – As a sole proprietor all business income or losses must be reported as personal income tax. The business itself is not taxed separately.

The advantages to the sole proprietorship are single control over the business and its decisions, easy to start up, less regulations and paperwork burden that the other types of business. The disadvantages are unlimited liability for their company debts and actions. The law does not recognize any distinctions between the owner’s business assets and personal assets. Banks are very skeptical about lending to these types business because there is only one person to hold liable for repaying the debt.

Breaking down self-employment tax can be classified into two realms. First being in the form of an individual’s income derived by their trade or business and the second being the income or loss by the individual’s partnership of said trade or business. This self employment tax is levied on income in excess of $400 and is in exclusion of real estate rentals, dividends, interest, capital gains tax,

But with advantages, there are also disadvantages of owning your own business. Five disadvantages of a sole proprietorship are: 1) The owner is personally liable for all debts and incurs all losses. The sole proprietor is responsible for all debts that the company owes. The owner takes all losses. There are no other owners to

A sole proprietorship is a business that has a single owner who is responsible for making decisions for the company. The costs are minimal it only requires a business name fictitious, a bank account and a commercial license. The exclusive property does not have double taxes on profits, such as in other business structures as in corporations. All taxes are reported in the statement of the individual owner. The owner has unlimited liability for the business and vice versa because legally there is no difference between the owner and his business.

Sole traders have unlimited liabilities,meaning that in terms of law there is no separation between them,hence the sole trader is also liable for the debts incurred within the business, which makes it very risky to run for a long-term.