Business Forms Worksheet
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Business Forms Worksheet
Jady Inguanzo
LAW/531
September 24, 2014
Robert Hedicke
Business Forms Worksheet
Sole Proprietorship
Advantages
1. Owners can establish a sole proprietorship instantly, easily and inexpensively.
2. A sole proprietor need not pay unemployment tax on himself or herself (although he or she must pay unemployment tax on employees).
3. Owners may freely mix business or personal assets.
Disadvantages
1. Owners cannot raise capital by selling an interest in the business.
2. Owners are subject to unlimited personal liability for the debts, losses and liabilities of the business.
3. Sole proprietorships rarely survive the death or incapacity of their owners and so do not retain value.
Summary:
The sole proprietorship is the simplest business form under which one can operate a business. The sole proprietorship is not a legal entity. It simply refers to a person who owns the business and is personally responsible for its debts. A sole proprietorship can operate under the name of its owner or it can do business under a fictitious name. The fictitious name is simply a trade name--it does not create a legal entity separate from the sole proprietor owner.
The sole proprietorship is a popular business form due to its simplicity, ease of setup, and nominal cost. A sole proprietor need only register his or her name and secure local licenses, and the sole proprietor is ready for business. A distinct disadvantage, however, is that the owner of a sole proprietorship remains personally liable for all the business's debts. So, if a sole proprietor business runs into financial trouble, creditors can bring lawsuits against the business owner. If such suits are successful, the owner will have to pay the business debts with his or her own money.
The owner of a sole proprietorship typically signs contracts in his or her own name, because the sole proprietorship has no separate identity under the law. The sole proprietor owner...
Jady Inguanzo
LAW/531
September 24, 2014
Robert Hedicke
Business Forms Worksheet
Sole Proprietorship
Advantages
1. Owners can establish a sole proprietorship instantly, easily and inexpensively.
2. A sole proprietor need not pay unemployment tax on himself or herself (although he or she must pay unemployment tax on employees).
3. Owners may freely mix business or personal assets.
Disadvantages
1. Owners cannot raise capital by selling an interest in the business.
2. Owners are subject to unlimited personal liability for the debts, losses and liabilities of the business.
3. Sole proprietorships rarely survive the death or incapacity of their owners and so do not retain value.
Summary:
The sole proprietorship is the simplest business form under which one can operate a business. The sole proprietorship is not a legal entity. It simply refers to a person who owns the business and is personally responsible for its debts. A sole proprietorship can operate under the name of its owner or it can do business under a fictitious name. The fictitious name is simply a trade name--it does not create a legal entity separate from the sole proprietor owner.
The sole proprietorship is a popular business form due to its simplicity, ease of setup, and nominal cost. A sole proprietor need only register his or her name and secure local licenses, and the sole proprietor is ready for business. A distinct disadvantage, however, is that the owner of a sole proprietorship remains personally liable for all the business's debts. So, if a sole proprietor business runs into financial trouble, creditors can bring lawsuits against the business owner. If such suits are successful, the owner will have to pay the business debts with his or her own money.
The owner of a sole proprietorship typically signs contracts in his or her own name, because the sole proprietorship has no separate identity under the law. The sole proprietor owner...