Buisness Law

Sole Proprietorships

The sole proprietorship is a business which is owned and operated by one person. To establish a sole proprietorship, you need only obtain whatever licenses you need and begin operations. Hence, it is the most widespread form of small business organization.

Legal advantages of establishing a sole proprietorship when carrying out business are ease of formation, because there are less formality and fewer legal restrictions associated. It needs little or no government approval and is usually less expensive than a partnership or corporation. Sole ownership of profits, the proprietor is not required to share profits with anyone. Control and decision making vested in one owner, in this case there are no co-owners or partners to consult. (Except possibly your spouse.) Flexibility, management is able to respond quickly to business needs in the form of day to day management decisions as governed by various laws and good sense. Additionally, relative freedom from government control and special taxation.

Legal disadvantages of establishing a sole proprietorship when carrying out business are unlimited liability, this is where the individual proprietor is responsible for the full amount of business debts which may exceed the proprietor's total investment. This liability extends to all the proprietor's assets, such as house and car. Additional problems of liability, such as physical loss or personal injury, may be lessened by obtaining proper insurance coverage. Another disadvantage is less available capital, in comparison to other types of business organizations. It is relatively difficulty in obtaining long-term financing. When carrying out business in a sole proprietorship they usually have relatively limited viewpoint and experience this is more often the case with one owner than with several.

Partnerships

A partnership is an arrangement where entities and/or individuals agree to cooperate to advance their interests. The Uniform Partnership...