Lit1 Task a

In: Business and Management

Submitted By huotarj
Words 1775
Pages 8
SOLE PROPEITORSHIP: This is the most common form of business today. The sole proprietorship is owned by a single individual who makes all of the business decisions when it comes to the operation of the business. Sole proprietorships are not legally differentiated from the owner; therefore the owner is legally liable for any business debts that are incurred or any lawsuits brought against the business.
It is also much harder for sole proprietors to obtain credit since they are using their own personal line of credit. Some big advantages to being a sole proprietor is the ease of starting of the business, and the tax advantages they receive by only having to pay tax on their personal taxes instead of both corporate and personal tax.  Liability: the sole proprietor is legally liable for all business debts incurred in the company. There is no difference between the person and the business therefore all personal assets are also considered business assets.
 Income Taxes: income taxes for the sole proprietor are only paid once on their individual income taxes. The owner can deduct business expenses on his personal income tax report, reducing his individual tax owed.
 Longevity/Continuity: Since the sole proprietorship is owned by one individual, if that individual were to pass away, the business would also die with them.
 Control: Sole proprietorships are controlled by a single individual responsible for making all of the critical decisions in the day to day operation of the business.
 Profit Retention: Sole Proprietors retain all profit from the business as personal income.
 Location: Sole proprietorships typically operate from a single location as they are the simplest form of business. They may even have the convenience of operating from the owner’s home.
 Convenience/Burden: Sole proprietorships are the simplest form of business and may…...

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