Company Analysis : Sole Proprietorship

1715 WordsApr 26, 20157 Pages
Sole Proprietorship is the simplest and most common type of business structure that is owned and operated by one person solely. For this type of structure, legally there is no distinction between this person and the business. Liability – The owner is solely responsible for the debts that the sole proprietary business incurs and all actions or decisions made by self or employees. Income Taxes – All income and losses for the sole proprietorship business are reported to the IRS via the owner’s personal income tax return. Longevity or Continuity of the organization – Typically, the sole proprietorship business will end if the owner dies. Control – The owner controls all aspects of the sole proprietary business or hires someone to do everything for them. Profit Retention – All profits are exclusively the owners to retain. Expansion/Location – Many sole proprietorship businesses’ are started at home; however, if the business owner wants to relocate or expand the business, they will have to check with the local officials about the zoning laws, licenses, and/or permits that may be needed for the new location. Compliance/Convenience/ Burden –The sole proprietorship must comply with local and state licensing and permit rules and IRS regulations as well when hiring employees. The convenience of owning a sole proprietorship is that it the owner has total control of all aspects of the business. The burden of owning the same business structure is that the owner is solely responsible for
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