What Are the Major Benefits of a Sole Proprietorship?

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A sole proprietorship is a business opened under the name of one individual or married couple. The sole proprietorship is not a separate entity, and all taxes are filed on a personal tax return. There are many advantages to starting a sole proprietorship.

Easy to Start

  • You can start a sole proprietorship with as little as $10 because in most states this is the most you will pay for a business permit. Other more expensive filings are not needed, so you can save the money you would spend on a lawyer on your business.

Control

  • The owner is the decision-maker in a proprietorship, so you do not have to clear decisions with a board of directors or a partner (in a partnership).

No Profit Sharing

  • In a sole proprietorship, the owner keeps all the profits. You do not have to share profits with investors as you would with a corporation.

Personal Use

  • As opposed to a corporation, you can use funds from your business for personal use. In business forms where there are partners or investors, you have to get permission to take money out of the company for personal expenditures.

Easy to Dissolve

  • If your business fails, all losses are your own, and you don't have the extra headache of paying back business partners. You will also have no lawsuits from angry investors as you would have with a corporation.

References

  • Photo Credit Image by Flickr.com, courtesy of traveling for about a month) (Jeremy Barwick
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