Sole Proprietorship

Sole Proprietorship
The sole proprietor is an unincorporated business with one owner who pays personal income tax on profits from the business. With little government regulation, they are the simplest business to set up or take apart, making them popular among individual self contractors or business owners.

Many sole proprietors do business under their own names because creating a separate business or trade name isn't necessary.

Sole proprietorship is also known as "proprietorship".

There is no separate legal entity created by a sole proprietorship, unlike corporations and limited partnerships. Consequently, the sole proprietor is not safe from liabilities incurred by the entity. The debts of the sole proprietorship are also the debts of the owner. However, all profits flow directly to the owner of a sole proprietorship.

The benefit of the sole proprietorship is the tax advantage. The disadvantage of a sole proprietorship is obtaining capital funding, specifically through established channels, such as equity (selling shares) and obtaining bank loans or lines of credit. As a business grows it often transitions to a limited liability company (LLC) or S corporation.

Investment dictionary. . 2012.

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Look at other dictionaries:

  • sole proprietorship — n: a business owned and controlled by one person who is solely liable for its obligations compare corporation, partnership Merriam Webster’s Dictionary of Law. Merriam Webster. 1996 …   Law dictionary

  • Sole proprietorship — A sole proprietorship, or simply proprietorship (Benjamen Clark.: sole trader) is a type of business entity which legally has no separate existence from its owner. Hence, the limitations of liability enjoyed by a corporation and limited liability …   Wikipedia

  • Sole proprietorship — A business owned by a single individual. The sole proprietorship pays no corporate income tax but has unlimited liability for business debts and obligations. The New York Times Financial Glossary * * * sole proprietorship UK US noun [C] (also… …   Financial and business terms

  • sole proprietorship — A business owned by a single individual. A sole proprietor pays no corporate income tax but has unlimited liability for business debts and obligations. Bloomberg Financial Dictionary * * * sole proprietorship UK US noun [C] (also sole propietor… …   Financial and business terms

  • sole proprietorship —    A business that is owned and managed by one person (or, for tax purposes, a married couple), and distinguished from a corporation or partnership. A sole proprietor and the business are one tax entity, so any business profits or losses are… …   Business law dictionary

  • sole proprietorship — A form of business in which one person owns all the assets of the business in contrast to a partnership, trust or corporation. The sole proprietor is solely liable for all the debts of the business …   Black's law dictionary

  • sole proprietorship — ➡ companies * * * …   Universalium

  • sole proprietorship — noun A business that is wholly owned by a single person, who has unlimited liability …   Wiktionary

  • sole proprietorship — individual ownership, control by one person …   English contemporary dictionary

  • sole proprietorship — Business owned entirely by one person …   Dictionary of automotive terms

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