Lit1

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• LIABILITIES – If the business incurs debt that can not be covered by the profit of the business the owner will be personally liable. You can be sued to satisfy the debt of the company and your personal property can be seized to satisfy company debts. • INCOME TAXES – Forming a Sole Proprietorship allows the owner to avoid the high tax rate that corporations pay due to it not being separate from the individual. • LONGEVITY/CONTINUITY – The business is the same as the owner so the business will exist as long as the owner is alive. • CONTROL – Since the business is the same as the individual he/she has complete control and management responsibilities without having to consult a partner or share holders. Since the sole proprietor has complete control he can make all decisions concerning his business including hours of operation, location and services. • PROFIT RETENTION – Since this business requires very little capital to start then the owner receives all profit. Plus the owner has the ability to raise capital to increase profit. • LOCATION – The owner can open his business or move where ever he/she can afford due to being the sole owner and having complete control over the business as long as they follow state and local guidelines. • CONVENIENCE/BURDEN – Starting a Sole Proprietorship is simple and the only legal formalities that you have are making sure the appropriate local permits and state forms or licenses are in place and filed. However if you are not operating under your name you must register with the secretary of the state to attain a separate tax ID number. GENERAL PARTNERSHIP: Is formed of two or more people, an association of persons or an unincorporated company with a created agreement showing proof of...
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