The Business Law Attorneys at KALIS, KLEIMAN & WOLFE have more than 20 years of experience in helping South Florida individuals and businesses with business formations and business law matters. We can help clients understand the advantages and disadvantages of various business structures such as a sole proprietorship, which can help the business owner make informed decisions and avoid potential future litigation.
A sole proprietor is someone who owns an unincorporated business by himself or herself. A sole proprietorship is not a legal entity. The sole proprietor is entitled to all profits and is responsible for all of the business’s debts, losses and liabilities. A sole proprietorship can operate under the name of its owner or it can do business under a fictitious name (trade name).
A sole proprietor can work as an independent contractor or operate a small business. Examples of sole proprietors can include bookkeepers, home health care workers, financial planners, landscapers, freelance photographers, house cleaning services, writers, tutors and more.
There are several advantages to forming a sole proprietorship. One advantage is that a sole proprietorship can be simple and inexpensive to establish. As the sole owner of the business, you have complete control over all decisions. Another advantage is that taxes can be easy to prepare and are among the lowest of similar business structures.
There are also some disadvantages to forming a sole proprietorship. One disadvantage is that the business operations responsibility and burden, in other words the success or failure of the business, falls on the sole proprietor. Another disadvantage is that the sole proprietor also assumes all the risk and personal liability for all the debt and obligations of the business. Further, it can also be difficult to raise additional funding, money and loans for the business, as the sole proprietor cannot sell an interest in the business.
If you need help with starting or managing a sole proprietorship or need assistance determining which business formation is best for your company, contact the experienced Business Law Attorneys at KALIS, KLEIMAN & WOLFE, the South Florida-based corporate and commercial litigation law firm today at (954) 791-0477.