what are some advantages of a sole proprietorship?
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A business owned by one person, who is entitled to all of its profits and responsible for all of its debts, is considered a sole proprietorship. This legal form is the simplest, providing maximum control and minimum government interference. Currently used by more than 75 percent of all businesses, it is often the suggested way for a new business that does not carry great personal liability threats. The owner simply needs to secure the necessary licenses, tax identification numbers, and certifications in his or her name, and you are now in business!\n\nThe main advantages that differentiate the sole proprietorship from the other legal forms are (1) the ease with which it can be started, (2) the owner's freedom to make decisions, and (3) the distribution of profits (owner takes all).  \n\nStill, the sole proprietorship is not without disadvantages, the most serious of which is its unlimited liability. As a sole proprietor, you are responsible for all business debts. Should these exceed the assets of your business, your cred­itors can claim your personal assets--home, automobile, savings account, and investments. Sole proprietorships also tend to have more difficulty obtaining capital and holding on to key employees. This stems from the fact that sole proprietorships generally have fewer resources and offer less opportunity for job advancement. Thus, anyone who chooses the sole proprietorship should be prepared to be a generalist, performing a variety of functions, from accounting to advertising. \n\nAdvantages\n \nYou're the boss.     \nIt's easy to get started.    \nYou keep all profits.    \nIncome from business is taxed as personal income.  \nYou can discontinue your business at will.   \n\nDisadvantages \n\nYou assume unlimited liability. \nThe amount of investment capital you can raise is limited.  \nYou need to be a generalist. Retaining high-caliber employees is difficult.  \nThe life of the business is dependent on the owner's.
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Most probably an LLC\n\nA corporation differs from the other legal forms of business in that the law regards it as an artificial being possessing the same rights and responsibilities as a person. This means that, unlike sole proprietorships or partnerships, it has an existence separate from its owners. It has all the legal rights of an individual in regards to conducting commercial activity -- it can sue, be sued, own property, sell property, and sell the rights of ownership in the form of exchanging stock for money.  \n\nAs a result, the corporation offers some unique advantages. These include (1) limited liability: owners are not personally responsible for the debts of the business, (2) the ability to raise capital by selling shares of stock, and (3) easy transfer of ownership from one individual to another. Plus, unlike the sole proprietorship and partnership, the corporation has "unlimited life" and thus the potential to outlive its original owners.  \n\nThe main disadvantage of the corporate form can be summed up in two words: taxation and complexity. In what amounts to double taxation, you must pay taxes on both the income the corporation earns and the income you earn as an individual. Along with this, corporations are required to pay an annual tax on all outstanding shares of stock. Given its complexity, a corporation is both more difficult and more expensive to start than are the sole proprietor­ship and the partnership. In order to form a corporation, you must be granted a charter by the state in which your home-based business is located. For a small business the cost of incorporating usually ranges from $500 to $1,500. This includes the costs for legal assistance in drawing up your charter, state incorporation fees, and the purchase of record books and stock certificates. And, since corporations are subject to closer regulation by the government, the owners must bear the ongoing cost of preparing and filing state and federal reports.  \n\nLLCs offer greater flexibility in ownership and ease of operation. There are no restrictions on the ownership of an LLC. An LLC is simpler to operate because it is not subject to the formalities by which S corps must abide. An LLC can be member-managed, meaning that the owners run the company; or it can be manager-managed, with responsibility delegated to managers who may or may not be owners in the LLC. \n\nAnd the owners of an LLC can distribute profits in the manner they see fit.
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Very complete source for every & @ll legal procedures; i liked what i briefly saw. (fyi) you may go directly to State Dept to start filing your Limited Liability Partnership,[at least here in my jurisdiction]co. even w/out notarizing, but if you want to make it that way, perfect; You may also consider an Incorporation since the benefits are extent on behalf of both partties-you as a service/professional provider or licitator and clients/co's that contracts you; If you incorporate and your customers dissagree and start any litigation for insatisfaction against you as resident agent[official incorporator] your private assets  / properties, house, land, personal vehicles won't be in risk, only the assets under corporation will be the ones to respond. Plus you will have higher financial rate when incorporated since corporation acquires its own juridical personality-versus you as an individual in a  Limited Society-partnership.
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I know the owners of several tree farms that would gladly sell you their interests for next to nothing. I know noone who has ever made money in this business. Avoid it like the plague.\n\nThere are advantages for poeple who own land and want to decrease their taxes by claiming an agricultural exemption and people who have lots of land with existing trees. But don't plan on a Christmas Tree lot. You will be competing with the people that are not just selling trees as a stand alone business.
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A sole proprietorship is the simplest of business forms - it began when the first person sold something to another person, millienia ago.
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The most important benefit is that one gets to earn (or pay oneself) before taxes whereas employees usually receive income after paying all taxes.
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Only a business will get to deduct business expenses from income to adjust the income that taxes are caluclated on.\n\nStart a sole proprietorship if nothing else, easy and then you can do it. Of course it will only affect future things.
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mine !   a sole proprietorship is just a co. owned and run by 1 person
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It is actually easier to start a "regular" business because there is less government oversight on it. Since there are many financial benefits to filing as a non-profit, it is harder to get that determination and to keep it.
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1) The ability to go for long periods with out a paycheck.\n2) The ability to pay large amounts of money for health ins.\n3) The drive to pound pavement to drum up new business.\n4) The patience to deal with slow paying clients.\n5) The personality to keep smiling when everyone is out to get you.\n6) The concept of tactics to know your competition and out perform them.\n7) The frame of mind to give superior customer service.\n8) The relief of knowing your a success!
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It allows for a low startup cost for someone to start a business.  Also for large established comanies it allows for information dissemination and another sales channel.
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Yes there is an advantage to creating a limited liability company.  As one of the other answers says, if someone slips and falls, the LLC gets sued and not you.  However, the loan you have on the property is probably signed by you personally, and if you lose the house and have the mortgage, it does still hurt you.\n\nBut the advantage is it limits the loss to one house instead of putting all your assets on the line.  You should also have a different LLC manage your buildings in case there is negligence in not doing some repairs.  LLC's will not protect you from negligence, but the more you put in front the more you are protected.  I usually tell people, don't do anything stupid.\n\nOne thing to remember, in most states, if an LLC owns the rental property, you HAVE to have an attorney file the eviction.  most landlords do it themselves to save money.  The state of ohio recently mandated that if an LLC owns the property, an attorney has to be used.  Not direct point, but that's essentially what it said.  As for other states, I would guess they are similar.\n\nGood luck and rental property is a good way to go
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Limited Liability Status. The main attraction of an LLC is its limited liability status, a feature that it shares with corporations. The LLC limit your personal liability from business debts and damages incurred by the business. It basically lets you off the hook from legal liabilities such as court judgments and legal settlements obtained against the business.\n\nTax Benefits. Like sole proprietorships, partnerships, and S corporations, the business profits and losses of an LLC are taxed at individuals' income tax rates. You will avoid a corporation's double taxation, where taxes are reported at a separate business level.\n\nOwners of the LLC. While owners of corporations are called stockholders, LLC owners are referred to as members. A member, who invests in the LLC and receive a percentage ownership interest in return, may be an individual or a separate legal entity such as a partnership or corporation. The percentage ownership is used to divide up the assets of the LLC when it is sold or liquidated, to split up profits and losses of the LLC or to divide up its voting rights. While an LLC can exist with one member, some states such as the District of Columbia and Massachusetts require LLCs to have two or more members.\n\nFlexible Management Structure. An LLC can be run either by its members or a management group elected by the members. While many small businesses are managed by their own members, an LLC can easily adopt a management-run structure in the following situations: the members decide to employ outside management help; not all of the members want to run the LLC; or an outside investor wants to be given a vote in management.\n\nFlexible Distribution of Profits and Losses. Similar to partnerships, dividing up profits among the LLC members is not restricted to the members' capital contributions. You may split up LLC profits and losses any way you wish, as long as it is provided for in the operating agreement.
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Look at the SBA.gov website, they have some good info.
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You are talking of three different things -- sole proprietorship, partnership and incorporation. Each of these legal structure has their pros and cons, and they have tax implications, liabilities, among others. Your goal should be to choose one for you.\n\nThe article "Choosing the Legal Structure of Your Small Business"  http://www.powerhomebiz.com/vol3/legalstructure.htm spells out the advantages and disadvantages of each legal structure. For sole proprietorship, while it is easy to form, you also assume unlimited liability. With partnership, while more heads are better than one, you have to share the profit (which may not seem so bad since your partner is your wife anyway). For corporations, while ownership may be easily transferable in the event the owner leaves the business, there is double taxation.\n\nOne thing to consider when doing business with your spouse is to have a "buy-sell" provision to address what happens to the partnership in the event of a partner's death, divorce, disability, bankruptcy, resignation or retirement. That can cover a lot of confusion in the event the partnership (or marriage) dissolves.\n\nI work with my husband in our limited liability company, and things are going very well. But we do have very specific provisions in our partnership agreement - from sharing of profit to any other eventualities.
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1. Starting Your Own Business. \n\nStarting an independent business of your own offers several advantages. You are free from contractual obligations required from franchisees, and from any precedents established by the previous business owner. You are able to start on a fresh, clean slate with total control on how the business is shaped and managed. You are free to offer a pioneering and proprietary product that could help you dominate your market. You can start with a bang, or at a slower pace, depending on your resources and entrepreneurial goals. There is no required upfront investment that you must raise; except for the level that you think your business requires to be successfully launched. You can choose the location you want, determine the products and service that you market, and decide whether you need employees or not.\n\nThe downside of starting a business from scratch could also be numerous. A new business entails greater risk than buying an established business or franchise. You need to determine whether a need exists for your products or service; and if it does, work to create awareness and branding. The start-up process also necessitates you to do the groundwork process by yourself - from business licenses and permits, establishing relations with suppliers, and establishing a customer base to support operations. Many new start-up businesses, particularly home businesses, find it hard to secure financing given the lack of operating histories and inexperience of the people involved.\n\nA new business will require a longer period of time to show profits, if at all. Entrepreneurs who decide on venturing on their own must be willing to dedicate considerable time and energy to establishing and nurturing the business.\n\n2. Franchising. \n\nFranchising incorporates the features of both a start-up and an existing operation. The franchise is the right to sell a product or service. When you purchase a franchise you are basically paying for the right to market an already established product or service owned by somebody else (the franchisor). Under your franchise agreement, you (the franchisee) are expected to market the product/service successfully.\n\nThis alternative route to business ownership has some distinct advantages. Risk is minimized, since a well-established franchise has a proven business method with established products or services. Franchises like McDonald's already has well-known name that could easily bring customers to the business and provide a competitive advantage for the franchisee.\n\nMany franchise organizations also provide extensive assistance in terms of marketing, advertising, even managerial support. Oftentimes, management training and follow-up assistance are provided. In many instances, In addition, you can realize cost savings on inventory items, supplies and equipment due to bulk purchase orders made by the franchisor, which in turn is passed on to franchisees. Some franchisors also assist the franchisee in securing financing, while some provide the funding themselves. Franchisees find it easier to convince banks and other lenders to provide loans because franchises are less risky than start-up businesses. Support can also be given in finding the right location, while some provide the layout, display, facilities and business techniques that have already proven successful in previous operations.\n\nFranchising could present problems to the business owner. At the onset, the high franchise fees required to be paid to the franchisor at the start of the franchise agreement may discourage any prospective business owners. Front fees can range from a few thousand dollars to hundreds of thousands of dollars, depending on the franchise. While some franchisors may require high initial fees, the trade-off may be poor support functions once the operations begin.\n\nIn addition to the upfront fees, royalty fees are also required on a monthly basis. The royalty fees are monthly payments based on a cert
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Pros and Cons for Incorporating\n\nAdvantages\n- Stockholders have limited liability.  \n- Corporations can raise the most investment capital. \n- Corporations have unlimited life.  \n- Ownership is easily transferable.    \n- Corporations utilize specialists.   \n\nDisadvantages\n- Corporations are taxed twice. \n- Corporations must pay capital stock tax.  \n- Starting a corporation is expensive.  \n- Corporations are closely regulated by government agencies.    \n\nLLC is not incorporation. It is a different legal structure from a corporation. The features of the LLC\n\n- Limited Liability Status. The main attraction of an LLC is its limited liability status, a feature that it shares with corporations. \n- Tax Benefits. Like sole proprietorships, partnerships, and S corporations, the business profits and losses of an LLC are taxed at individuals' income tax rates. You will avoid a corporation's double taxation, where taxes are reported at a separate business level.\n- Owners of the LLC. While owners of corporations are called stockholders, LLC owners are referred to as members. \n- Flexible Management Structure. An LLC can be run either by its members or a management group elected by the members. \n- Flexible Distribution of Profits and Losses.\n\nFor comparisons of LLCs and Corporations:\n\nLLCs vs. C Corporations http://www.powerhomebiz.com/vol97/llcs.htm\nS Corp. vs. LLC: Which Structure is Right for Your Business  http://www.powerhomebiz.com/vol136/structure.htm