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Sole proprietorship

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A sole proprietorship is a business which legally has no separate existence from its owner. Hence, the limitations of liability that a corporation provides do not exist for a sole proprietor. Sole proprietorships can operate in the name of the individual or can have a company name. If the business is operated using a name other than that of the owner, typically, it must register the trade name, or "doing business as" (DBA) name with the appropriate agency within its jurisdiction -- most likely a city or county.

Sole proprietorship advantages

  • Few regulatory requirements compared to corporation
  • No corporate tax payments as income is treated as individual income tax
  • Small formation costs (few legal fees)

Sole proprietorship disadvantage

  • Personal liability for the debts and obligations of the business.
  • Typically, outside investors will not invest in a sole proprietorship

See also

External links

This entry includes content from the following Wikipedia article: Sole Proprietorship.