Sole Proprietorship

1
Sole Proprietorship
Group 1 Cidona Toua Andrew
Ashley
2
What is Sole Proprietorship?

• A business owned and operated by one person.
• A sole proprietorship is the easiest and most
  popular form of business ownership.
• The sole proprietorship can be organized very
  informally, is not subject to much federal or
  state regulation, and is relatively simple to
  manage and control.

3
Advantages Disadvantages

• Proprietorships are easy and inexpensive to
  create.
• The owner has complete authority over all
  business decisions and activities.
• The owner receives all profits.
• This is the least regulated form of business
  ownership.
• The business itself pays no taxes. Taxes are paid
  as personal income of the owner.

• The owner has unlimited liability for all debts
  and actions of the business. Unlimited liability
  means that the debts of the business must be paid
  from the personal assets of the owner.
• It is often difficult to raise capital.
• A sole proprietor is limited by his/her skills
  and abilities
• The death of the owner automatically dissolves
  the business.

4
How to set up a Sole Proprietorship

• First you decide on a name.
• You will also need to apply for a Certificate of
  Doing Business Under an Assumed Name (DBA).
• Make sure you are the only business in the area
  using the name you have chosen.

5
Continued.

• If you have Employees, you will also need an,
  employer Identification Number (EIN). This number
  is used for tax purposes.
• It is used to track federal income tax withheld
  and federal income tax returns.

6
Interesting Facts

• Approximately 76 percent of all businesses in the
  U.S. are sole proprietorship.
• A sole proprietorship is not a corporation, it
  does not pay corporate taxes, but rather the
  person who organized the business pays personal
  income taxes on the profits made, making
  accounting much simpler.