Sole Proprietorship Essay Example for Free

Sole Proprietorship EssayLiability is unlimited. The possessor or sole proprietor is lawfully responsible for all debts, law suit settlements and contract fulfillments. Though insurance policies can be purchased to comfort against unforeseen events, a judgment decree or balance exceeding the purchased plan amount could observe directly out of the personal assets of the owner including but not limited to personal home, bank accounts, college cash in hand or other transparent assets.Income Taxes for sole proprietorship act no differently than paying measuring stick income tax. The IRS sees no distinction between the sole proprietor and the owners personal finances. A trite 1040 ricochet will be prepared yearly including a schedule C or C-EZ form for profit disclosure. Tax rate will vary year to year depending on the net shekels of the commercial enterprise.Longevity is limited to the lifetime of the owner or the completed sale of the companys tangible and intangible ass ets to an individual or outside entityIf the owner dies without selling, the business ceases to exist.Control is the most appealing calculate for Sole Proprietorships as the owner needs only answer to themselves. The owner makes all decisions for the daytime to day operations of the company including entering into contracts, handling finances, hiring employees and even at will dissolution of the company.Profit guardianship is a key factor that distinguishes Sole Proprietorship over all other business forms. The owner retains all profits for their own. They have no legal obligation to share the profits with any one. interest note that this does not grant the owner clemency from paying their debts or obligations if profits are gloomy for any given length of time.Location can be anywhere but is registered on a state level and moldiness abide by local state laws. If distributing goods to other states than the registered state of the business other tax implications come in to play s uch as whether sales tax must be applied.