Sole Proprietorship free essay sample

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 businesss losses and liabilities. Liability- This falls directly on the owner. All debts, liabilities and losses fall on the owner. The owners assets can be used to alleviate the businesss debt. Income taxes- All income generated through a sole proprietorship is taxed by the Internal Revenue Service. This is reported on the owners personal tax return. Longevity/Continuity- A sole proprietorship exits only as long as the owner is alive or until the owner decides to sell or close the business. Control- The control belongs entirely to the business owner, who also assumes the risks of the business. Sole proprietorship is an independently owned business. The procedures for setting up a Sole proprietorship are less complicated than other businesses. This type of business is easy to set up and maintain. In order to setup this business, you will need time, space, equipment, a business name and license and finances to start. Once everything has been done, your business will be ready to start. Setting up a Sole proprietorship is easy when you follow all of the right procedures. There are many advantages in a Sole proprietorship. One of the major advantages in this type of business is the ease of tax regulations. Sole proprietors pay self employment taxes on the profits made, which makes accounting much easier. In other businesses like corporate, you will need to set up a separate tax form for the business alone. This advantage is one of the most important advantages when starting a sole proprietorship. Another advantage is being your own boss. You can start and finish whenever you want. You are totally in control and make all decision. Profits made and losses accrue to you and you only. Being the boss to me is a great advantage. Flexible hours are another advantage in sole proprietorship. Being able to be flexible is great when you have a family. Inheritance is another advantage in this business. Your family can inherit your business and keep the family legacy. Other advantages include lees responsibility, tax write offs and all your profits are yours to keep. The advantages of sole proprietorship are great. While the advantages of sole proprietorship can be good, it has its disadvantages to. Personal liability is the biggest disadvantage of choosing to operate sole proprietorship. Sole proprietors are legally responsible for all debt against the business. Being legally responsible put the business and their personal assets at risk. This is one of the biggest disadvantages in this type of business. Another disadvantage in this business is not being able to be medically insured. This disadvantage can put a strain on the sole proprietor and their family. Insurance can be difficult to receive when one of the sole proprietors’family members has had a recent health issue. Medical insurance is a big disadvantage, when you are in this type of business. Other disadvantages are raising money, finances, weak management and tax flexibility. Finances can be a big disadvantage in this business. By the business being individually owned, bank owners look at the business being a potential risk for loans. Weak management can put your business at risk. You have to know how to sell you product and be good at what you do. The disadvantages are not great in this business. In every business there will be advantages and disadvantage but you have to choose how to cope with them. Sole proprietorship can be a successful business but it depends on the individual. Like every business it has its advantages and disadvantages. Success depends on one’s ability to achieve and overcome obstacles in life. You have to be committed in order to succeed in this business. Sole proprietorship can be successful but only if you want to succeed.