When choosing what type of structure to use, small businesses and startups often opt for a sole proprietorship. Under this classification, business and owner are combined into a single entity. One of the most attractive qualities of a sole proprietorship is the fact that it’s extremely simple – there’s no question about who is running the show. Owners maintain full control of business operations.
It’s probably easier than you think to start this kind of business. Becoming an entrepreneur seems like it would be loaded with red tape and startup fees, but sole proprietorships come with very few expenses. Furthermore, it’s not really a hassle to get the ball rolling, especially with the efficiencies offered by the internet. Paying startup fees for a sole proprietorship can be a simple matter of just clicking some buttons online.
State registry is required for business names if sole proprietorships are titled something besides the owner’s name. But this means that using your own name is also an option, making things that much easier. Most business owners that take this route use both first and last name, or just their last.
The downside to sole proprietorships is that simplicity comes with the price of risk. Liability falls exclusively on the owner of the business. Fortunately, insurance policies are readily available for these types of entrepreneurs. Contract and tort risks are made much less of a concern with the security of solid insurance coverage.
It’s not necessarily a downside, but taxation policies for sole proprietorships are similarly the burden of the owner. Taxes are collected via “pass-through” methods, which means that income is recorded and submitted annually alongside an owner’s individual tax returns.
Persons who start sole proprietorships maintain ownership until they make the decision to shut it down, or until they pass away. In the event of the latter scenario, proprietorship may be transferred to an intended party if the owner includes transferability instructions in his or her last will and testament. Without a will, Tennessee state officials will be in charge of transferring or allocating properties and assets related to the business during the probate process.
At Turner Law Offices, P.C., our skilled lawyers are trained to assist clients wishing to form or manage a sole proprietorship, as well as those seeking legal representation for any other category of business litigation. We know how hard it is to start a business in today’s economy, and we can help you to obtain the security you’re looking for. Call today, or go online to set up your Free Initial Consultation, and meet with attorneys who’s willing to do whatever it takes to help you meet your goals.
