Posted On: January 31, 2010
Starting a Business – Sole Proprietorship (Part 2 of 7)
The sole proprietorship is owner-managed and is suitable for a single-owner/employee enterprise. The owner/employee faces total personal liability but is taxed personally via their individual income tax return. Although there are no structural formalities within a sole proprietorship, the name of the operation should be registered with the state.
The advantages of Sole Proprietorship are low start up costs, no double taxation (i.e. taxing the individual and the business), no liability for others, no profit sharing, and complete control over operations.
The disadvantages of Sole Proprietorships are that the owner incurs personal liability and can be thin on management.
