One of the very first things you must do if you are starting a business, is to determine which structure is best for your business.
But before we get into the first structure, please know that you have to consult with us first before deciding on a structure for your business. Get us involved in the process early to make sure you are choosing the right one for your business as there is a lot of factors to consider that you may not know about.
What is a Sole Proprietorship?
A sole proprietorship is a type of business entity that is legally not separate from its owner. There are no partners in a sole proprietorship. The taxes for a sole proprietorship are calculated and paid on the individual’s personal income tax return.
Advantages:
- A sole proprietorship is the simplest and least expensive type of organization to create or dissolve.
- The owner retains absolute control over business decisions .
- A sole proprietor can deduct business expenses from personal income.
- It is simple and inexpensive to maintain.
Disadvantages:
- The owner faces unlimited liability.
- With regard to liability and taxation, the owner and the business are one in the same.
- You can’t raise funds through sale of Equity.
- Upon death of the owner, the business is legally terminated.
