New Year's Business Resolutions
As the year draws to an end it is sometimes helpful to review our past actions and set new goals for the upcoming new year. The following information may be helpful with making a business resolution for 2009.
ADVANTAGES OF THE SOLE PROPRIETORSHIP
Ø Control and management is vested in one owner.
Ø Pay taxes at one level – your individual rate.
Ø Requires no effort or expense to form or maintain.
Ø Sole ownership of profits. Easy to take profits out.
Ø Needs no government approval.
Ø Requires less formality and fewer legal restrictions.
DISADVANTAGES
Ø Proprietor has full and unlimited liability for all business activities. This may include debts that exceed the proprietor’s total investment. Potential liability extends to all of the proprietor’s personal assets.
Ø Unstable business life, due to risks associated with death or disability of the owner, which could force the business to close.
Ø No difference between business and personal assets
Ø Business income is taxed at personal tax rates, which is often higher than corporate tax rates at certain income levels.
Ø Additional self-employment taxes.
Ø Certain business expenses are only partially tax deductible.
Ø Limitations on available benefits.
Ø Difficult to raise additional capital, depending upon credit worthiness of the individual
Labels: Risk Management, Sole Proprietorship
posted by ShieldCorp @ 11:54 AM
3 Comments
3 Comments:
Looking at the advantages and disadvantages of sole proprietorship, there seem to be more disadvantages than good. Unlimited liability, for example, can be a worry, due to the fact that personal property is not protected. As you also mention, lack of continuity can also be an issue (eg. illness, etc of the proprietor can bring the business to a close). It is no wonder that more businesses are choosing to form LLCs in order to protect their assets while obtaining tax benefits and more flexibility in general. It will be interesting to see what the next year holds for business and if we will continue to see a rise in LLCs and fewer sole proprietorships.
Looking at the advantages and disadvantages of sole proprietorship, there seem to be more disadvantages than good. Unlimited liability, for example, can be a worry, due to the fact that personal property is not protected. As you also mention, lack of continuity can also be an issue (eg. illness, etc of the proprietor can bring the business to a close). It is no wonder that more businesses are choosing to form LLCs in order to protect their assets while obtaining tax benefits and more flexibility in general. It will be interesting to see what the next year holds for business and if we will continue to see a rise in LLCs and fewer sole proprietorships.
There are several entities and individuals who provide incorporation services. They can advise you, complete all relevant documentation and file them with the regulatory agency on your behalf. If needed, some of the incorporation services might help in arranging the first meeting of the shareholders of an incorporated business.
Some of the incorporation services provide these services online also. It is not necessary that you avail of all the services offered by them. There are different kinds of "packages" available to suit your needs. For example, if you have completed documentation on your own then you can pay a lesser amount as fees; just get the documents checked and verified by one of the firms providing incorporation services and then file them on your own. Or maybe you hand over these documents to the incorporation service provider for filing. It is not necessary to hire an incorporation service provider to carry out the process of incorporation. But such firms and individuals help you in expediting the process.
http://www.clickandinc.com/
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