Sole Proprietorship Sole Proprietorships are types of a business entity in which case has no isolated existence from its owner. The barriers of liability by a corporation and its constrained liability partnerships do not employ to the sole. The debts of the business are debts of the owner itself. A sole proprietor essentially means, “an individual performs business in their own name and there is one single owner". Advantages of a Commercial Sole Proprietorship: A sole proprietor has direct control as well as any decision making authority over the business A small number of recognized business requirements No corporate tax expenses Any sale or alteration can take place at any giving time at he discretion of the sole proprietor In contrast, an indistinguishable small business operation as a corporation or partnership would be required to arrange and submit a tax return several pages in length plus quarterly as well as annual payroll tax returns. In addition, all of the profits from the law firm go right to the owner. A sole proprietorship often has a lot of freedom from the government regulations. Every form of commercial ownership has several types of government regulation, but in general, the commercial sole proprietorship has the least. A commercial law firm structured as for a sole proprietorship will apt to have a hard time raising capital since shares of the law firm cannot be sold, and there is a slighter sense of authenticity relative to a business organized as a corporation or limited liability company (LLC). Hiring employees may also be difficult. This type of business will have unconstrained liability and, as a result, the proprietor is personally liable if the law firm is sued. The life span of the law firm is also tentative. As soon as the owner decides not to have the law firm anymore, or the insurance, and may come across complexity finding any if, one of the family members to be covered has a previous health issue. Another shortcoming of a sole proprietorship is that as the law firm becomes successful, the risks accompanying the law firm have a propensity to grow. To reduce those risks, a sole proprietor has the choice of forming a limited liability company (LLC). Note down that such an LLC would still be treated as a sole proprietorship for income tax accounting purposes.
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