ZhiFeng Leather CO. LTD is a sole proprietorship factory in China that designs, manufactures, and sells bags and luggage. Some advantages of operating as a sole proprietorship include easy formation with minimal paperwork, full ownership and control by the sole owner to make decisions, and favorable tax treatment by the IRS where business income is taxed as personal income. However, disadvantages include unlimited liability for the sole owner, difficulty raising finance to fund business growth, and inability to benefit from economies of scale.

1. Company name: ZhiFeng Leather (Shenzhen) Co. Ltd. (Sole proprietorship)
Company De
ZhiFeng Leather CO. LTD is a foreign sole proprietorship factory in China,
dealing mainly in bags and luggages. We also have our own designing, manufacturing and
selling teams. The main products are: computer bags, Briefcases, backpack, women stylish bags,
handbags, Travelling bag, luggage bags, wallets, Name card holder, Key purse, ipod case,
Passport holder and golf shoes bags etc. Please visit our website for our product pictures.
Five Advantages of a Sole Proprietorship
Many small business owners starting new businesses choose to operate their companies as sole
proprietorships. Sole proprietorships are the most common business structure and are owned by
one person. Business owners choose to operate as a sole proprietorship because of the many
advantages available. Choosing the appropriate business structure is a major decision, so
knowing the advantages of operating a sole proprietorship can help you decide if it is the best
structure for your business.
 Formation
One advantage of starting a sole proprietorship is the simplicity of formation. Very little paper
work is required if you choose to file your business name. In most cases, you can visit your local
courthouse and complete a "Doing Business As" or a fictitious name form to operate under your
business name. A small fee is required for completing the paperwork. You are then given a
certificate with the name of your business. Use the certificate to open bank accounts and apply
for business credit cards. Unlike other business structures, individuals owning sole
proprietorships are not required to file annual reports or legal documents required by some other
business structures.
 Ownership
The sole owner of a sole proprietorship possesses all of the authority to make decisions on behalf
of the company. Full ownership and management control is another advantage of owning a sole
proprietorship. Owners are not required to attend formal meetings required of owners and
members of other business structures. With a sole proprietorship, the owner can decide to sale or
transfer the company to another individual and make important business decisions at his
discretion.

2.  Taxation
Another advantage of forming a sole proprietorship is the taxation rules established by the
Internal Revenue Service. Sole proprietors are not required to file separate tax returns for their
business. Income made from the business is counted as personal income and owners pay taxes
according to their individual tax rates. Sole proprietors must pay Social Security and Medicare
taxes as well. The tax rules regarding sole proprietorships allow owners to avoid the double
taxation of corporations. The IRS allows sole proprietors to take deductions on business
expenses, which lowers owners’ taxable income amount
 Changing Business Structures
If your business grows to a place that the business structure of a sole proprietorship no longer
works to your advantage, you can easily change your business structure to a more complex
model. The only requirement for going from a sole proprietorship to another business structure is
filling out the paperwork for your new business structure. You are not required to fill out
paperwork with a regulatory body because sole proprietorships are not governed by regulatory
bodies.
 Distribution of Profits
Sole proprietors are the sole owners of their businesses and do not split profits with other
owners. One hundred percent profit retention allows sole proprietors to use the money at their
discretion. You can choose to reinvest the money back into the business to expand the company,
start another business or use it for personal reasons.
Disadvantages of a sole trader
Just like any other form of business, being a sole trader can also have its disadvantages.
 Liability
Sole traders are not seen as a separate entity by the law. Therefore, they are subject to
unlimited liability. This means if the business gets into debt, the business
 owner is liable
In the worst case, this may mean a person risks their home, personal savings and any
other assets they have both in and outside of the business.
 Finance
Sole traders often find it difficult to raise finance to fund their business. They may
struggle with expansion in the future.
 Reverse economies of scale
Sole traders will be unable to take advantage of economies of scale in the same way as
limited companies and larger corporations, who can afford to buy in bulk. This might

3. mean that they have to charge higher prices for their products or services in order to cover
the costs