International Accounting and Finance Degree BAB231 Study Guide - Final Guide: Fiduciary, Sole Proprietorship, Tax Bracket
20 Apr 2018
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Just register and start (inexpensive: using own name - then, no need to register. If you do(cid:374)"t register you (cid:272)a(cid:374) (cid:271)e fi(cid:374)ed & (cid:373)ay (cid:374)ot (cid:271)e a(cid:271)le to sue: business name registration is valid for five years at which time a renewal is required. Owner has unlimited personal liability for all debts and obligations of the business. Bank loan owner must repay the loan. Breach of contract owner is personally liable for breach. Tort committed by employee owner is personally liable. Speed and independence (quick and independent decision making) Limited access to capital (can only borrow) Limited life span (dies with owner - business can"t be transferred or sold as it has no legal status) Tax disadvantages - no special tax rules governing a sole proprietorship (must claim all business income with personal taxes); if your business is profitable, this could put you in a higher tax bracket. So, the biggest disadvantage of a sole proprietorship is personal liability.
