LIT1 task a and b
LIT1 – Task 1 Part A
SOLE PROPRIETORSHIP: A “for profit business” owned and operated by an individual. Owning a sole proprietorship allows an individual to run a business any way they see fit with few state/federal regulations and limited legal formalities. The owner of a sole proprietorship assumes considerable risks by without liability protection and therefore is held personally liable for any judgments against the company and is susceptible to loss of business assets, personal property and real estate.
Liability: The business and the owner are considered one entity. A sole proprietor will be held personally responsible for any debts, profit, or lawsuits that arise during the operation of the business. They are also personally liable for the acts or misconduct of any employee or company representative during business operations.
Income Taxes: The business owner is liable for taxes on the business’ total profits even if some or all of those profits are invested back into the business. Taxes for a sole proprietorship are filed on the owner’s individual tax return in addition to self-employment tax.
Longevity/Continuity: A sole proprietorship is dissolved when the owner opts to close the business, retires or passes away. Essentially the business dies with the owner, sometimes making a sole proprietorship a stepping stone in organizing a growing business.
Control: The owner assumes absolute control of the business.
Profit Retention: The owner retains all business profits and is responsible for all business related losses.
Location: A sole proprietorship can be located anywhere providing the owner abides by the state and local regulations. If an owner decides to move a sole proprietorship into a new location it is best to contact the local city hall to determine what permits will be needed.
Convenience/ Burdon A sole proprietorship is simple to establish because it requires little paperwork, and the owner maintains complete control of decisions
SOLE PROPRIETORSHIP: A “for profit business” owned and operated by an individual. Owning a sole proprietorship allows an individual to run a business any way they see fit with few state/federal regulations and limited legal formalities. The owner of a sole proprietorship assumes considerable risks by without liability protection and therefore is held personally liable for any judgments against the company and is susceptible to loss of business assets, personal property and real estate.
Liability: The business and the owner are considered one entity. A sole proprietor will be held personally responsible for any debts, profit, or lawsuits that arise during the operation of the business. They are also personally liable for the acts or misconduct of any employee or company representative during business operations.
Income Taxes: The business owner is liable for taxes on the business’ total profits even if some or all of those profits are invested back into the business. Taxes for a sole proprietorship are filed on the owner’s individual tax return in addition to self-employment tax.
Longevity/Continuity: A sole proprietorship is dissolved when the owner opts to close the business, retires or passes away. Essentially the business dies with the owner, sometimes making a sole proprietorship a stepping stone in organizing a growing business.
Control: The owner assumes absolute control of the business.
Profit Retention: The owner retains all business profits and is responsible for all business related losses.
Location: A sole proprietorship can be located anywhere providing the owner abides by the state and local regulations. If an owner decides to move a sole proprietorship into a new location it is best to contact the local city hall to determine what permits will be needed.
Convenience/ Burdon A sole proprietorship is simple to establish because it requires little paperwork, and the owner maintains complete control of decisions