Thrive II Preview

What is a Sole Proprietorship?

Written by on September 21, 2020 in Stuff with 0 Comments

A sole proprietorship is a very popular form of business due to its simplicity, as it is easy to set up, and has a nominal cost. A sole proprietor will need to register itself and secure a local license and, as soon as this is ready, the proprietor is ready to rock on the business. Getting an emergency loan might be of great help when setting up the business. Therefore, I will share some insights regarding what are the steps to start this kind of business and what are the options that you should consider if you want to establish one.

  1. What is a sole proprietorship?
  • It is a term used for a person who owns the business and is legally responsible for any debts it might acquire.
  1. What are the steps to starting a sole proprietorship?
  • The first step is to know the business you will start. This can help you plan the initial stages to have a smooth sailing business.
  • Prepare your budget. Since you are the sole proprietor, make sure that you have enough funds to sustain your business. Most banks offer loans for business owners as long as you meet their qualifications.
  • Get the requirements. Documents and licenses required by the government should be complete before starting the operations. This is to prevent you from paying fines and worst, closure of your business.
  • Open a bank account. This is a requirement to separate business money from your personal money. This will also give you a clearer view of your profit and increases your credibility in the bank if in case you needed to apply for a loan.
  • Spend within your means. As much as possible, be financially prepared when you want to start a business so that you only have minimal liabilities to pay. This will make earn your ROI faster. Always be prepared for unnecessary situations because you are the only one who can help your business surpass these events.
  1. What options should you consider outside of a sole proprietorship?
  • Other than a sole proprietorship, you can consider partnerships, limited liability company or LLC, corporation, and cooperative. Choose what is best for you and what makes you more at ease.
  1. What are the pros and cons of a sole proprietorship?
  • In a sole proprietorship, you are the only one who will decide on your business but on the other hand, if something bad happens, you are also the only one responsible for it.
  • Sole proprietorships’ income is treated as a personal income by the government making it easier for you to file taxation. On the other hand, it is difficult to raise funds or long-term financing because of lesser assets.
  1. What are the tax implications of registering as a sole proprietorship?
  • A sole proprietorship is often treated as a personal income that is why it is taxed through a personal tax return. You do not need to file a separate tax return for your business because you have to declare all your business income and losses through your personal tax return.

Tags: , ,

Subscribe

If you enjoyed this article, subscribe now to receive more just like it.

Subscribe via RSS Feed Connect on YouTube

New Title

NOTE: Email is optional. Do NOT enter it if you do NOT want it displayed.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

FAIR USE NOTICE. Many of the articles on this site contain copyrighted material whose use has not been specifically authorized by the copyright owner. We are making this material available in an effort to advance the understanding of environmental issues, human rights, economic and political democracy, and issues of social justice. We believe this constitutes a 'fair use' of the copyrighted material as provided for in Section 107 of the US Copyright Law which contains a list of the various purposes for which the reproduction of a particular work may be considered fair, such as criticism, comment, news reporting, teaching, scholarship, and research. If you wish to use such copyrighted material for purposes of your own that go beyond 'fair use'...you must obtain permission from the copyright owner. And, if you are a copyright owner who wishes to have your content removed, let us know via the "Contact Us" link at the top of the site, and we will promptly remove it.

The information on this site is provided for educational and entertainment purposes only. It is not intended as a substitute for professional advice of any kind. Conscious Life News assumes no responsibility for the use or misuse of this material. Your use of this website indicates your agreement to these terms.

Paid advertising on Conscious Life News may not represent the views and opinions of this website and its contributors. No endorsement of products and services advertised is either expressed or implied.
Top
Send this to a friend