Sole Proprietorship Is the most common business type, where the business is operated and owned by a single individual. In this type of business, the sole proprietor provides capital, does not share profit or loss and runs the business alone. As such, the business and the owner are indistinguishable for tax and legal purposes (Dlabay, 2011). To differentiate this business from other business types, a sole proprietorship is discussed under the following characteristics. i. Liability: Incase of business debts, the owner is liable personally-unlimited liability. The assets of the business owner can be taken to pay off business debts since the two are not distinct (Dlabay, 2011). This is the major limitation of a sole proprietorship. ii. …show more content…
Thus, the assets of the partners can be taken to settle the business’s obligations (Dlabay, 2011). ii. Income Taxes: Like a sole proprietorship, the partners are taxed on personal income as the business is considered as a pass-through entity. The partnership can maintain and file records showing how they share profit and loses (Dlabay, 2011). iii. Longevity: Similar to a sole proprietorship, in case of death or incapacity of a partner the business can cease to exist. However, if there existed a buy-sell agreement, the remaining client can buy the heirs of incapacitated or deceased partners. Vitally, the ownership of general partnership does not pass to personal representatives (Dlabay, 2011). iv. Control: Control is exercised by all partners. As such, each partner is an agent of other partners. In addition, decisions are through consultations and as such decision making takes time. v. Profit retention: Partner’s share profit according to predetermined rates that may be based on workload or capital contribution (Dlabay, 2011). vi. Location: Relocation is complicated compared to a sole proprietorship in that, for instance, when moving from one state to another general partners are considered as foreign agents and must have a registered agent, who receives tax and legal documents on behalf of the business (Dlabay,
| A sole proprietorship is easy to create; there is minimal creation cost and time.The single owner has autonomy in decision making; sole owner makes all decisions related to the business and has complete ownership of business’s finances.
1. What countries represent the largest global business opportunities for the next decade? What factors determine the size of the opportunity?
3. Many multinational companies market products under different brand names when conducting business overseas. For example, Unilever’s Axe Body Spray is called Lynx in the United Kingdom and Australia. Research some of your favorite brands (or products that you buy on a regular basis), and list if and how they use alternate product names when conducting business in foreign markets. Then, explain why a company might use a different brand name abroad.
Sole proprietorships are the most common type of business in the U.S. They are most commonly chosen because they are the easiest type of business to set up and give the sole owner of the company complete control of the company. There are many benefits to a sole proprietorship in regards to control, profit retention, and convenience.
Suppose a limited partnership has just one general partner, who suddenly dies. Will the partnership dissolve? Could a limited partnership continue if one of three general partners suddenly dies? If yes, under what circumstances?
Sole Proprietorship Sole proprietorship is the most common form of business in the United States. It is a relatively simple way for an individual to start a business since legal costs and business requirements are minimal, and the owner has complete control over the business. Though a sole proprietor is not responsible for any corporate tax payments, the owner is responsible for taxes incurred on the income generated from the business as part of his or her personal income tax payments, and personally shoulders any other risks or obligations. A sole proprietor may also choose to file their business under a fictitious business name or a DBA (doing business as), allowing him or her to operate and market the business under a more typical
Sole proprietorship: 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 business's losses and liabilities.
• Liability: The owner has unlimited liability. When the business fails it is up to the owner to pay all the creditors off.
A sole proprietorship is a form of business that is owned by a single individual. • Liability – Due to the lack of legal distinction between the owner and the business, the owner is fully responsible and liable for all debts that the business incurs in the same manner that an individual is fully responsible and liable for all debts that they incur. There is no legal distinction between the assets of the owner of the sole proprietorship and the business; this means that creditors have the ability to come after the owner’s business and personal material assets. Income Taxes – Since the business is the same as the owner of the sole proprietorship, all profits or losses from the business are filed by the
A1a: The Sole Proprietorship is the most common business form in the U.S. It offers the advantages of no-cost, easy startup, and full owner/operator autonomy with regard to business decisions.
Sole Proprietorship: This is a type of business is where the business and the owner are one in
Anytime you start up a business or you take over another company there are multiple things you must do to get started. One of the major things one must do is decide on what type of ownership you want. There are many different types of business ownerships out there, but some will benefit you more than others. In this paper you will be learning about the difference two types of business ownerships you can have. The main point of the paper is to help someone that’s going to become an owner of a business be able to do what’s best for not only them, but also what will be best for the business. Sole trader ship and partnership are the two best ownership because they will benefit the owner and business more by going by what the company stands for.
After the creation of a business plan, the next step to operating a business is the selection of an appropriate business structure. Different legal forms of business ownerships affect different managerial and financial factors from the business names to the tax obligations (Gregory, n.d.). The most common forms are sole proprietorship, partnership, cooperatives, and corporations. There are different types of corporations in the business world, but the two most general corporation types are S Corporation and Limited Liability Company (LLC) (Ferrell et al., 2013). The sole proprietorship is the easiest and most basic form of business ownership. It is owned and run by one individual, which is the proprietor. The individual is entitled to all profits and is responsible for all the business’s
Sole trader-it’s a business that is owned by only one person and it can have one or more employees. This type of business organization often succeeds because the owner has total control of businees, the owner keeps all profit and it’s cheap to start-up,but also it can be difficult to raise financial,it may be difficult to specialise or enjoy economies of scale and can also have problems with continuity if sole trader retires or dies.
There are many advantages and disadvantages when owning your own business. When you own you own business, it’s known as a sole proprietorship. But with any type of business, there will always be advantages and disadvantages.