Sole Proprietorship Essay Example for Free

Sole Proprietorship EssayLiability is unlimited. The owner or fix proprietor is legally responsible for all debts, law correspond settlements and contract fulfillments. Though insurance policies can be purchased to protect against unforeseen events, a judgment decree or balance exceeding the purchased plan sum up could come directly out of the personal assets of the owner including but not limited to personal home, bank accounts, college funds or other tangible assets.Income Taxes for sole proprietorship act no differently than paying standard income evaluate. The IRS sees no distinction between the sole proprietor and the owners personal finances. A standard 1040 form impart be prep ard yearly including a schedule C or C-EZ form for profit disclosure. Tax rate will vary year to year depending on the net profits of the business.Longevity is limited to the lifetime of the owner or the completed sale of the companys tangible and intangible assets to an individual or outside e ntityIf the owner dies without selling, the business ceases to exist.Control is the most appealing factor for Sole Proprietorships as the owner needs only answer to themselves. The owner makes all decisions for the day to day operations of the company including entering into contracts, handling finances, hiring employees and even at will dissolution of the company. kale retention 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. Please note that this does not grant the owner clemency from paying their debts or obligations if profits are low for any given length of time.Location can be anywhere but is registered on a state level and must accept by local state laws. If distributing goods to other states than the registered state of the business other tax implications come in to play such as whether sales tax must be applied.