A Sole Proprietorship is business owned by one person, usually the person who has day-to-day responsibilities for running the business. It is the simplest and most common structure to start a business.
Sole proprietors own all the assets of the business and the profits made by the business. They also assume complete responsibility for any of its liabilities or debts. In other words, you are one in the same with the business.
Advantages of a Sole Proprietorship:
- Easiest and most cost-efficient form of business ownership
- Requires no governmental filing except a fictitious business name statement
- Your receive all income made by the business
- The business is easy to dissolve, should that occur
Disadvantages of a Sole Proprietorship:
- You have unlimited liability for any debts and are legally responsible for any debts against the business
- You may have a hard time raising funds by those who are motivated by the opportunity to own a part of the business
- Sole proprietors are not off the hook for paying taxes, either. You have to pay self-employment (Social Security and Medicare) taxes as well as quarterly estimated income taxes.
Are you a business or an entrepreneur? We can help with your legal needs.
Mollaei Law is a business law firm serving businesses and entrepreneurs. We can help with all of your business needs including tailoring legal documents for your business, reviewing and drafting contracts, negotiating, business planning, setting up business entities, and helping with any of your business transactional forms.
For more information, visit http://www.mollaeilaw.com/starting-a-business/ or give us a call at (818) 925-0002.