Sole Proprietorship
A business with one owner who is responsible for all features of the business. Everything that happens in the company from the daily operation to the legal obligations are controlled by one individual.
Sole Proprietorship Advantages:
• Convenience - Usually the least costly to begin. Sole proprietorships are easy to start up. They entail acquiring the proper licenses and permits. Regulations very from industry, state, and county. There is no administrative configuration.
• Control- Owners are permitted to organize the company in the way they prefer. All choices about how the business will operate are made by the owner. The owner has the choice of hiring someone to run the company or doing it themselves.
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Also, each of the partners are accountable for paying self-employment tax.
• Control – It is required to have no less than one general partner. All day to operations are the responsibility of the general partner, who is also responsible for making legally binding business decisions. Like a general partnership, general partners in a limited partnership are unlimited in the amount of personal liability they have for the debts of the business.
• Profit retention – Revenues earned by the business go directly to the partners.
• Location -Moving or expanding a partnership is simple it requires filing a new DBA with the new state. Taxes should also be taken into consideration when moving a partnership to a new state since it will have a direct impact on the financial aspect of the business
• Convenience - The ability to trade company stock publicly and gain investors. When the company’s profit rises each partner and investor can receive higher returns on the stock. . There are no laws governing the structure of the partnership and the partners can run the business in whatever manner they choose.
Disadvantages
• Income taxes – States that do not acknowledge a limited partnership for tax purposes treat this type of business structure as a non-partnership.
• Longevity or continuity of the organization – The partnership agreement and certificate, needs to specify the wishes of the partner for