Lit1: Legal Issues for Bus. Org
We will start with discussing your current structure, a Sole Proprietorship. Since you currently are operating this way, it will be easiest, and make the most sense to explain it to you. As with the rest of the structures, we will go through a list of each of the seven characteristics of a business.
Liability-First is a concern for you, liability, say for instance, in the situation of a contract employee. This could end up being a major concern for you. It is one of the larger disadvantages of a sole proprietorship. When it comes to liability, you, your finances, and your assets, are not kept separately. What this means to you and your family is if anything ever happens, all of the liability and expenses falls to you. Huge drawback. Income Taxes- Next is income taxes. This is something I would actually consider an advantage. You and your business are taxed as one unit. You also have the ability to reduce your income tax by writing off your expenses. Longevity or continuity of the organization.- Longevity and continuity of your sole proprietorship is, well, nonexistent. Since you are the business, when you are no longer here, your business is no longer here. Again, another drawback. Control: Whether or not control is an advantage or disadvantage is all up to you to decide. You have complete control over everything. Since you don’t have a partner, boss, board, or shareholders to answer to, you have complete control over your business. I see this as an advantage. Profit retention is all yours. You keep all of your profit, and will not be splitting it with anybody. This is another advantage. Location is another great advantage of a sole proprietorship. It is fairly simple to move your operation. Say for instance, you just had a new grandkid in another state, and want to move closer. You
Liability-First is a concern for you, liability, say for instance, in the situation of a contract employee. This could end up being a major concern for you. It is one of the larger disadvantages of a sole proprietorship. When it comes to liability, you, your finances, and your assets, are not kept separately. What this means to you and your family is if anything ever happens, all of the liability and expenses falls to you. Huge drawback. Income Taxes- Next is income taxes. This is something I would actually consider an advantage. You and your business are taxed as one unit. You also have the ability to reduce your income tax by writing off your expenses. Longevity or continuity of the organization.- Longevity and continuity of your sole proprietorship is, well, nonexistent. Since you are the business, when you are no longer here, your business is no longer here. Again, another drawback. Control: Whether or not control is an advantage or disadvantage is all up to you to decide. You have complete control over everything. Since you don’t have a partner, boss, board, or shareholders to answer to, you have complete control over your business. I see this as an advantage. Profit retention is all yours. You keep all of your profit, and will not be splitting it with anybody. This is another advantage. Location is another great advantage of a sole proprietorship. It is fairly simple to move your operation. Say for instance, you just had a new grandkid in another state, and want to move closer. You