The Advantages Of Sole Propreitorships By Pamela Upshur At Isnare.com Ezine Articles

A sole proprietorship is the simplest and most common form of business to start. The sole proprietorship is a popular business form due to its ease of setup, nominal cost, and simplicity. All you need is a great idea, an eagerness to get started and a business plan to help you succeed. Careful planning is fundamental to success. Common proprietorship structures include part-time businesses, consultants and contractors.

The formalities and paperwork are substantially less than that of a corporation. This allows a sole proprietor to open a business with relative ease. You may have to register your business with your local city, or county government by filing out a simple form.

As a sole proprietor, filing your taxes is generally easier than a corporation. You simply fill out a IRS form 1040 including your business losses and profits. Your individual and business income are considered the same. A self-employed tax implications will apply.

This form of business has several advantages:

1. Ease of starting and ending the business All you have to do to start a sole proprietorship is buy or lease the needed equipment (e.g., a saw, a word processor; a tractor; lawn mower) and put up some announcements saying you are in business. It is just as easy to get out of business; you simply stop. There is no one to consult or to disagree with about such decisions. You may have to get a permit or license from the local government, but that is no problem.

2. Being you own boss Working for others simply does not have the same excitement as working for yourself...at least, that is the way sole proprietors feel. You may make mistakes, but they are your mistakes...and so are the many small victories each day.

3. Pride of ownership People who own and manage their own businesses are rightfully proud of their work. They deserve all the credit for taking the risks and providing needed goods and services.

4. Leaving a legacy Business owners have something to leave behind for future generations to build on.

5. Retention of company profit Other than the joy of being your own boss, there is nothing like the pleasure of knowing that you can earn as much as possible and not have to share that money with anyone else (except the government, in taxes.)

6. Maintain the ability to close shop and cut your losses at any time with a sole proprietorship. Sole proprietors enjoy the advantages of complete control over operation, scheduling, and output.

7. The ability to write off virtually every expense you have year-round as a sole proprietor.

8. All the profits of a sole proprietorship are taxed as the personal income of the owner; and the owner pays the normal income tax on that money (However, owners do have to estimate their taxes and make quarterly payments to the government.)

Before you take on this challenge, interview several people about the advantages and disadvantages of being your own boss. They will give you insights and hints on how to avoid problems.

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