Sole proprietorship characteristics copy

3/11/2020 Khandoker Mufakkher Hossain/ 01911689503 1
পরিরিরি

The advantages of sole
trader business are the
following:

Advantages-
Easy formation
•Direct motivations
•Quick decision and prompt action
•Better Control
•Maintainance of Business Secrecy
•Personal relations
•Flexibility in Operations

•Encourages self-employment
•Incetives for hard work
•Minimum government regulations
•Tax advantages
•Better Control of business Functions
•Social desirability
•Benefits of hereditary goodwill

6
1. Easy to form: It is very easy and simple to form
and organize a sole trader’s business. There are no
legal formalities.
2. Simple to manage: It is a small organization. It can
be managed easily by the owner himself.
3. Profit incentive: Sole trader enjoys all the profits
for himself; This profit motive is an incentive to work
hard.
4. Quick decisions: Since he is the sole organizer, he
can take quick decisions. He can act promptly
according to the changes in the market.

5. Contact with customers: He is the owner and manager of the
concern. He will be in a position to study the tastes and needs of
customers personally since he establishes good contacts with
them.
6. Business secrets: He can maintain the business secrets for
himself. Maintenance of secrecy is an important matter in any type
of business organization.
7. Smooth running: As he is the sole proprietor there will not be
differences of opinions or disputes. It helps smooth running of the
concern.
8. Efficiency and economy: The organization is a small one. He
can have close supervision. He can reduce the costs of the
management and all sorts of waste. Business can be run
efficiently.

9. Flexibility: Changes in the business can be
adopted at any time. Flexibility is facilitated by small
investment. It can be shifted from place to place very
easily.
10. Family training: He takes the help from the
members of his family in maintaining business. His
children get training in the business activities.
11. Self employment: Small scale units can be
easily started. Nationalized banks are also helping in
this direction.

12. Social advantages: It provides
opportunities to a number of individuals. Many
can become entrepreneurs with limited
resources.
13. Tax advantages: Income tax is imposed on
the personal income of the sole trader, but not
on the profits of the concern. Hence it is
advantageous.

3/11/2020 Khandoker Mufakkher Hossain/ 01911689503

Sole trader business
disadvantages also:

Limited capitalUnlimited liability
Lack of Continuity
Limited size Lack of managerial
expertise
Limited scope for employees
Limited scope of expanasion
Risk of wrong decisions.

Sole trader business suffers from certain
serious limitations (disadvantages) also:
1. Limited capital: Use of limited capital means
limited profits only. If there is any necessity to
expand business there may not be sufficient
resources.
2. Limited skill: As there is only one man the
managerial ability is limited.

3. Limited borrowing capacity: The borrowing
capacity of a sole trader is limited to the extent
of his financial position.
4. Unlimited liability: The creditors can recover
their loan amount not only from the properties of
the business but also from his personal
properties. So his liability is unlimited.

5. Hasty decisions: The sole trader takes all
decisions for himself. So there may be hasty and
thoughtless decisions.
6. Short life: If the sole trader does not have
children, or if his children are not interested in
continuing the business, the business would
come to an end. There is no guarantee of
continuous existence in this type of business.

7. No division of labor: As it is a small unit, it is
not possible to introduce division of labour in the
management.
8. Dependence on employees: If there
is expansion of business, it is inevitable for the
proprietor to depend on the paid managers.

9. Limited area of operation: The business is small.
So the activities cannot go beyond a certain area.
10. Lack of large scale economies: Sole trader’s
business is small scale only. He cannot do
his business on large scale due to lack of financial
resources. So he cannot enjoy large scale
economies of production, buying or selling.

Suitability of sole trading concern
A sole trading concern may carry its business
successfully under the following circumstances.
1. Where business is carried on small scale;
2. Where capital requirement is less;
3. Where prompt and quick decisions are
required;
4. Where risk is less;

5. Where personal element plays an important role;
6. Where market is local;
7. Where secrecy in business is a must;
8. Where freedom of the businessman is involved;
9. Where business is seasonal;
10. Where there is no need for specialization.

In spite of all the limitations, a sole
trading concern is a popular form of
organization in all parts of the world.
Thus, we can say that it has its own
place in the field of business even
today. Its future is bright.

What is a partnership?
Definition and meaning

What is a partnership? Definition and
meaning
By law, a partnership is a relationship
formed by the agreement of at least two
people to run a business as co-owners.

In other words, a partnership is a
firm consisting of several owners
– each one has invested in the
business.

In some cases, all the partners
are actively involved in the
business – they work in it –
while in other cases some may
be less involved in the running
of things, or not at all.

Individuals who have invested in
the business but do not work in it
are known as limited partners and
informally as sleeping partners.

A partnership differs from a
corporation in that it is not a
separate entity from the
owners.

Income tax is paid by the
partnership, however, the profits
and losses are divided up and kept
by the partners, depending on how
the original agreement was set up.

The partners in a partnership
do not necessarily have to be
just active people, they could
be corporations, schools, the
government, sleeping partners,
churches, etc.

Famous partnerships
Below are listed some famous
businesses that either started off
as partnerships or continue as such
today.

– Warner Bros: the founders were
pioneering figures in the movie
industry. They introduced sound to
movies and revolutionized musical
films. Founded in 1923 in Culver
City, California, USA.

– Hewlett Packard: the partnership
was founded in a small garage in
Palo Alto, California, in 1939. The
firm has since gone on to become a
PC manufacturing giant.

Hewlett and Packard’s first successful
product was an audio oscillator, which
Walt Disney snapped up for the movie
theatre surround sound systems it
designed for its famous musical cartoon
Fantasia.

– John Lewis Partnership: a British
employee-owned retailer that
operates the John Lewis department
stores, as well as Waitrose
supermarkets.

It also offers banking, financial and
other retail-related services. The
business has more than 88,000
employees. Founded in Oxford Street,
London, UK, by John Spedan Lewis in
1929.

– McDonald’s: founded by partners
Richard and Maurice McDonald in 1940
in San Bernadino, California, USA. Ray
Krok joined the team in 1995 and later
bought the company from the brothers,
founding the McDonald’s Corporation.
Today is has restaurants in 119 nations.

– Microsoft: founded by Bill Gates and
Paul Allen. It was officially established in
1975 when Allen invented the company
name by combining two words –
microcomputer and software. Today it is
a leading software maker and one of the
world’s most valuable companies.

– Apple: founded by Steve Jobs and Steve
Wozniak in Cupertino, California, USA, in
1976. You just have to look at the effect
Jobs’ death had globally to appreciate the
historical importance of this partnership.
When the partnership was set up, Jobs
looked after marketing while Wozniak
dealt with the technical side of things.

What Are the Different
Types of Partnership

Types of Partnership
Partnership types may be divided
into three categories:
1. General partnership
2. Limited partnerships
3.Limited Liability Partnerships
(LLP)

(1) General Partnership:
The liability of partners is unlimited in general
partnership. This means that the creditor of the
firm can realise his duties in full from any one of
the partners or collectively by attaching their
personal property. All the partners personally and
collectively are liable for the obligations of the
firm. All partners have equal rights and all of them
can participate in management.
General partnership is the following kinds:

(a) Partnership at Will:
This type of partnership continues up to the
time partners have faith in each other. It is
dissolved when all partners want
dissolution or any of the partner’s given
notice for dissolution of the firm. The
duration of the firm is not fixed beforehand.

the partnership at will continues upto the
time, the partners have faith in each other.
such a partnership is formed to carry on a
lawful business for an indefinite period. a
firm can be dissolved by a partner by giving
notice in writing to his fellow partners. the
partnership will stand dissolved from the
date of such notice.

(b) Particular Partnership:
If a partnership is established for a definite
work or a definite period, it is known as a
particular partnership. when the work is
completed or the period specified expires, the
partnership comes to an end. An example of
particular partnership is a partnership is
formed for a limited period of 4 years , the firm
would stand dissolved.

Particular Partnership-It is of two kinds:
(1) Fixed Work Partnership:
This type of partnership is started to complete a
fixed work. After the completion of work the
partnership dissolves.
(2) Fixed Term Partnership:
This type of partnership is established for a
definite period. The partnership dissolves with the
termination of the period.

(2) Limited Partnership :
If in a partnership, the liability of one or more
partners is limited to the amount of capital invested
by them, it is known as a limited partnership. In
such a firm at least one partner must have
unlimited liability. So in a limited partnership, the
liability of some partners is limited while the
liability of some partners is unlimited. The partners
with limited liability are called special partners and
they cannot participate in management. They can
make suggestions only.

(3) Limited Liability Partnerships (LLP):
Limited liability partnerships (LLP) recollect the tax
rewards of the general partnership form but offer
some personal liability protection to the
participants. Single partners in a limited liability
partnership are not personally responsible for the
illegal acts of other partners, or for the debts or
responsibilities of the business. Because the LLP form
changes some of the essential parts of the traditional
partnership, some state tax specialists may subject a limited
liability partnership to non-partnership tax rules.

Present partnerships that request to take
advantage of LLP status do not need to change
their existing partnership agreement, however,
they may choose to do so. In order to change
status, a partnership simply files an
application for registering as a limited liability
partnership with the suitable agency.

All countries require disclosure of the
partnership’s name and principle place of
business. Some countries also require, among
other things, identification of the number of
partners, a brief description of the business, a
statement that the partnership will maintain
insurance, and written acknowledgment that
the limited liability status may expire.

Types of Partners:
1.General, Active or Working Partner:
This is the first type of partner in partnership
business.The partner who provides capital and
takes the active part in the conduct of business is
known as a general or active partner. He is also
known as working partner who gives special
assistance to the firm. He may or may not be
renewed by him. It depends upon the agreement
between the partners.

2.Inactive, Dormant or Sleeping Partner:
The partner who provides capital to the
business and shares in the profit or loss
of the firm but does not participate in the
management is known as an inactive,
dormant or sleeping partner.

3.Nominal Partner:
A nominal partner is one who lends his
name to the firm as a partner. Such
partner does not invest any capital nor he
participates in management. However, his
liability towards third parties is just like
the other general partners.

4.Partner in Profit Only: A person may
become a partner for sharing profits only but
he does not get a share in its loss. He
provides capital and is also responsible to
third parties like other partners. Such a
partner is generally inactive but associated
with his money and goodwill.

5.Limited Partner: A limited partner is a
partner whose liability is limited to his
invested capital only. Such partner cannot
take part in the management of the
business but he can inspect the accounts
and receive profit from the business.
Moreover, a partnership cannot be
established only with limited partners.

5.Secret Partner: Some people
become a partner but his
membership is kept secret from
outsiders. Such partner is known as a
secret partner. His liability is
unlimited and liable for the losses of
the business. He can take part in the
working of the business.

7.Partner by Disposal or Holding
Out: When a person is not a partner but
poses himself as a partner either by words or
in writing, he is called a partner by disposal
or holding out. He shall be liable to an
outsider who deals with the firm on the
presumption of that person being a partner in
the business though is not a partner and does
not contribute anything to the business.

8.Minor Partner: A minor is a type of
partner who cannot enter into a contract
according to the act. So a minor cannot be
made partner in the real sense of the term.
However, a minor may be taken as a partner
with the consent of all partners.

8.He is like a limited partner. His
personal property is not liable to pay the
debts of the firm. However, he can share
in partnership property and profits of
the firm. He cannot take an active part
in the management of the firm.

9.Retired or Outgoing Partner: A partner
is known as retired or outgoing partner
when he leaves the firm but other
partners continue to carry on the
business. He is liable for all the debts of
the firm, which were incurred before his
retirement. He may continue to be liable
if proper notice of his retirement is not
given to the creditors.

10.Incoming Partner: A person
who joins an existing firm with the
consent of all the existing partners is
known as a new or incoming partner.
He is not held liable for the debts and
obligations of the firm incurred
before his joining the firm.

10.However, he may be held liable
for such debts only when he agrees
to it and the creditors have informed
accordingly. Incoming partner has
not only to contribute to the capital
of the firm but also to pay some
goodwill to the existing partners,

11.Quasi Partner: This is the last
types of partnerships in my list. A quasi-
partner is one who is no longer a
partner of business but has left his
capital in the business as a loan. He
receives interest on such as loan is not
paid off.

The sole proprietor owner will typically
have customers write checks in the
owner's name, even if the business
uses a fictitious name.
একমাত্র স্বত্বাধিকারী মাধিককর সািারণত গ্রাহকরা মাধিককর নাকম
চেক ধিখকত পাকরন, এমনধক যধি ব্যব্সাটি চকানও কধিত নাম
ব্যব্হার ককর।

Sole proprietor owners can, and often do,
commingle personal and business property
and funds, something that partnerships,
LLCs and corporations cannot do.
একমাত্র মালিকানাধীন মালিকরা ব্যলিগত এব্ং ব্যব্সাল়িকf,n সম্পলি এব্ং তহলব্িগুলি
একলত্রত করতত এব্ং প্রা়িশই করতত পাতরন, অংশীদালর, এিএিলস এব্ং
কতপপাতরশনগুলি এটি করতত পাতর না।

Sole proprietorships often have their bank
accounts in the name of the owner. Sole
proprietors need not observe formalities
such as voting and meetings associated with
the more complex business forms.
একমাত্র মালিকানাধীনতদর প্রা়িশই মালিতকর নাতম তাতদর ব্যাংক অযাকাউন্ট থাতক। একমাত্র
স্বত্বালধকারীতদর আরও জটিি ব্যব্সাল়িক ফতমপর সাতথ জল়িত ভ াটদান এব্ং লমটিংত়ির মততা
আনুষ্ঠালনকতা পািন করা উনলিত ন়ি।

Sole proprietorships can bring lawsuits
(and can be sued) using the name of the
sole proprietor owner.
একমাত্র মালিকানাধীন একমাত্র মালিকানার নাম ব্যব্হার কতর মামিা করতত
পাতর (এব্ং মামিা করা ভেতত পাতর)।

Many businesses begin as sole
proprietorships and graduate to more
complex business forms as the
business develops.
অকনক ব্যব্সায় একমাত্র মাধিকানা ধহসাকব্ শুরু হয় এব্ং
ব্যব্সাকয়র ধব্কাশ হওয়ার সাকে সাকে আরও জটিি ব্যব্সাধয়ক
ফমম স্নাতক হয়।a

Because a sole proprietorship is
indistinguishable from its owner,
sole proprietorship taxation is
quite simple.
চযকহতু একক মাধিকানা তার মাধিককর কাছ চেকক পৃেক
পৃেক, একমাত্র মাধিকানা ট্যাকেশন চব্শ সহজ।

Because a sole proprietorship is
indistinguishable from its owner, sole
proprietorship taxation is quite
simple.
ভেতহতু একক মালিকানা তার মালিতকর কাছ ভথতক পৃথক পৃথক, একমাত্র
মালিকানা টযাতেশন ভব্শ সহজ।

একমাত্র মালিকানার মাধ্যমম উপালজি ত আয়টি তার মালিমকর দ্বারা
অলজি ত আয়। একজন একক স্বত্বালধ্কারী স্ট্যান্ডার্ি ফমি 1040 সহ
একটি লসলর্উি লস পূরণ কমর এবং ফাইি কমর একমাত্র মালিকানা
উপাজি ন এবং / অথবা লিাকসান এবং বযয়মক লরমপার্ি কমর।
The income earned by a sole proprietorship is
income earned by its owner. A sole proprietor
reports the sole proprietorship income and/or
losses and expenses by filling out and filing a
Schedule C, along with the standard Form 1040.

Your profits and losses are first recorded on
a tax form called Schedule C, which is filed
along with your 1040. Then the "bottom-
line amount" from Schedule C is
transferred to your personal tax return.
আপনার িাভ এব্ং ক্ষধতগুধি প্রেকম তফধসি ধস নামক একটি ট্যাে ফকমমর সাকে চরকর্ম
করা হয়, যা আপনার 1040 সহ িাকয়র করা হয়। তারপকর ধসধর্উি ধস চেকক
"নীকের অংকশর পধরমাণ" আপনার ব্যধিগত ট্যাে ধরট্াকনম স্থানান্তধরত হয়।

This aspect is attractive because business
losses you suffer may offset income earned
from other sources. As a sole proprietor, you
must also file a Schedule SE with Form
1040.
এই রিকটি আকর্ষণীয় কািণ আপরি যে ব্যব্সারয়ক ক্ষরিতি ভু গতেি িা অিয
উত্স যেতক উপারজষ ি আয়তক অফতসট কতি। একমাত্র স্বত্বারিকািী রিসাতব্
আপিাতক ফমষ 1040 এি সাতে একটি রিরিউল এসইও ফাইল কিতি িতব্।

You use Schedule SE to calculate how
much self-employment tax you owe.
আপলন কতটা স্ব-কমপসংস্থান কর .ণী তা গণনার জনয সম়িসূিী
এসই ব্যব্হার কতরন।

You need not pay unemployment tax on
yourself, although you must pay
unemployment tax on any employees of the
business.
আপনার ধনকজর উপর চব্কারকত্বর ট্যাে চিওয়ার িরকার চনই, যধিও
আপনাকক অব্শযই ব্যব্সাকয়র চয চকানও কমমোরীর উপর চব্কারকত্বর
কর ধিকত হকব্।

Of course, you won't enjoy
unemployment benefits should
the business suffer.
অব্শযই, ব্যব্সায়টি ক্ষধতগ্রস্থ হওয়া উধেত আপধন
চব্কারকত্বর সুধব্িা উপকভাগ করকব্ন না।

Sole proprietors are personally liable for all
debts of a sole proprietorship business.
একমাত্র মারলকািািীি ব্যব্সায়ীিা একক মারলকািািীি ব্যব্সাতয়ি সমস্ত
debtsযণি জিয ব্যরিগিভাতব্ িায়ব্দ্ধ।

Let's examine this more closely
because the potential liability can be
alarming.
আসুি এটি আিও ঘরিষ্ঠভাতব্ পিীক্ষা করি কািণ সম্ভাব্য
িায়ব্দ্ধিা উতেগজিক িতি পাতি।

Assume that a sole proprietor borrows
money to operate but the business
loses its major customer, goes out of
business, and is unable to repay the
loan.
অনুমান করুন চয একমাত্র স্বত্বাধিকারী পধরোিনার জনয bণ চনন তকব্
ব্যব্সায়টি তার প্রিান গ্রাহককক হারায়, ব্যব্সাকয়র ব্াইকর যায় এব্ং
theণ পধরকশাকি অক্ষম হয়।

The sole proprietor is liable for the
amount of the loan, which can
potentially consume all her
personal assets.
একমাত্র স্বত্বালধ্কারী theলণর পলরমামণর জনয
দায়বদ্ধ, যা সম্ভাবযভামব তার সমস্ত বযলিগত
সম্পদ গ্রাস করমত পামর।

Imagine an even worse scenario: The
sole proprietor (or even one her
employees) is involved in a business-
related accident in which someone is
injured or killed.
আরও খারাপ পধরধস্থধতটি কিনা করুন: একমাত্র মাধিক (ব্া তার একজন
কমমোরী) ব্যব্সায় সম্পধকম ত একটি দুর্মট্নার সাকে জধ়িত যার মকিয চকউ আহত
ব্া মারা চগকছ।

The resulting negligence case can be
brought against the sole proprietor
owner and against her personal assets,
such as her bank account, her
retirement accounts, and even her
home.
ফিস্বরূপ অব্কহিা মামিাটি একমাত্র মাধিকানার মাধিক এব্ং তার ব্যধিগত
অযাকাউন্ট চযমন তার ব্যাংক অযাকাউন্ট, তার অব্সর অযাকাউন্ট এব্ং এমনধক
তার ব্াধ়ির ধব্রুকেও আনা চযকত পাকর।

Consider the preceding paragraphs
carefully before selecting a sole
proprietorship as your business form.
আপনার বযবসাময়র ফমি লহসামব একক মালিকানা বাছাই
করার আমগ পূবিবতী অনুমেদগুলি সাবধ্ানতার সামথ
লবমবচনা করুন।

Accidents do happen, and businesses go out
of business all the time. Any sole
proprietorship that suffers such an
unfortunate circumstance is likely to quickly
become a nightmare for its owner.
দুর্পটনা র্তট থাতক এব্ং ব্যব্সা়িগুলি সব্পদা ব্যব্সাত়ির ব্াইতর িতি ো়ি। এই ধরতনর
দু প াগযজনক পলরলস্থলততত ভে ভকানও একক মালিকানা দ্রুত তার মালিতকর জনয দুুঃস্বতে
পলরণত হতত পাতর।

If a sole proprietor is wronged by
another party, he can bring a
lawsuit in his own name.
যধি চকানও একমাত্র স্বত্বাধিকারী অনয পকক্ষর দ্বারা অনযায় করা হয়
তকব্ চস তার ধনকজর নাকম মামিা করকত পাকর।

Conversely, if a corporation or LLC is
wronged by another party, the entity
must bring its claim under the name of
the company.
ধব্পরীকত, যধি চকানও ককপমাকরশন ব্া এিএিধস অনয পকক্ষর দ্বারা
অনযায় করা হয় তকব্ সত্তাকক অব্শযই চকাম্পাধনর নাকম তার িাধব্
আনকত হকব্।

The advantages of a sole proprietorship
include:
একমাত্র মাধিকানার সুধব্িার মকিয রকয়কছ:
Owners can establish a sole proprietorship
instantly, easily and inexpensively.
মাধিকরা তাত্ক্ক্ষধণকভাকব্, সহকজ এব্ং সাশ্রয়ী মূকিযর একক
মাধিকানা প্রধতষ্ঠা করকত পাকর।

Sole proprietorships carry little,
if any, ongoing formalities.
একক মাধিকানা েিমান আনুষ্ঠাধনকতা সামানয, যধি
োকক।

A sole proprietor need not pay
unemployment tax on himself or herself
(although he or she must pay
unemployment tax on employees).
একজন একমাত্র স্বত্বাধিকারীর ধনকজর ব্া ধনকজর উপর চব্কারকত্বর
কর পধরকশাি করা উধেত নয় (যধিও তাকক ব্া তাকক কমীকির
উপর চব্কারকত্বর কর ধিকত হকব্)।

Owners may freely mix business or
personal assets.
মাধিকরা অব্াকি ব্যব্সা ব্া ব্যধিগত সম্পি ধমধশ্রত করকত পাকর।

The disadvantages of a sole
proprietorship include:
একমাত্র মাধিকানার অসুধব্িাগুধির মকিয রকয়কছ:

Owners are subject to unlimited personal
liability for the debts, losses and liabilities of
the business.
মালিকরা ব্যব্সাত়ির debtsণ, ক্ষলতর এব্ং দা়িব্দ্ধতার জনয
সীমাহীন ব্যলিগত দা়িব্দ্ধতার লব্ষ়ি।

Owners cannot raise capital by selling an
interest in the business. Sole proprietorships
rarely survive the death or incapacity of their
owners and so do not retain value.
মালিকরা ব্যব্সাত়ির প্রলত আগ্রহ লব্লি কতর মূিধন সংগ্রহ করতত পাতর না।
একমাত্র মালিকানা খুব্ কমই তাতদর মালিকতদর মৃতু য ব্া অক্ষমতা ভথতক ভব্েঁতি থাতক
এব্ং তাই মান ধতর রাতখ না।

One of the great features of a sole
proprietorship is the simplicity of
formation. Little more than buying and
selling goods or services is needed.
একক মারলকািাি অিযিম িুিষান্ত বব্রিষ্ট্য ি'ল গঠতিি সিলিা। পণয ব্া
পরিতর্ব্া যকিা যব্িা কিাি যিতয় একটু যব্রি প্রতয়াজি।

In fact, no formal filing or event is
required to form a sole proprietorship;
it is a status that arises automatically
from one's business activity.
প্রকৃ তপতক্ষ, একক মালিকানা গঠতনর জনয ভকানও আনুষ্ঠালনক ফাইলিং
ব্া ইত ত্টর প্রত়িাজন হ়ি না; এটি এমন একটি লস্থলত ো কারওর
ব্যব্সাল়িক লি়িাকিাপ ভথতক স্ব়িংলি়ি াতব্ উনলিত হ়ি।

What is the meaning of sole proprietorship?
Definition: A business that legally has no separate existence from
its owner. ... The sole proprietorship is the simplest business
form under which one can operate a business. The sole
proprietorship is not a legal entity. It simply refers to a person
who owns the business and is personally responsible for its
debts.
সংজ্ঞা: এমন একটি বযবসায় যা আইনতভামব তার মালিমকর লথমক পৃথক অলস্তত্ব রামে না। ... একমাত্র
মালিকানা হ'ি সহজতম বযবসালয়ক ফমি যার অধ্ীমন লয লকানও বযলি বযবসা পলরচািনা করমত পামর।
একমাত্র মালিকানা আইনী সত্তা নয়। এটি লকবি এমন লকানও বযলিমক লবাঝায় যা বযবসাময়র মালিক এবং
তার debtsলণর জনয বযলিগতভামব দায়বদ্ধ।

What is an example of a sole proprietorship?
Sole Proprietorship examples include small
businesses, such as a single person art studio,
a local grocery, or an IT consultation service.
The moment you start offering goods and
services to others, you form a Sole
Proprietorship.

What type of business is a sole
proprietorship?
A sole proprietorship is a business with a
single owner and not registered as a corporation,
partnership or limited liability company. A sole
proprietor can work as an independent
contractor or operate a small business. Sole
proprietors own businesses in many
industries.

Why is sole proprietorship important?
What Is the Most Important Benefit of Sole
Proprietorships? The most common small
business entity is a sole proprietorship because
it is extremely easy and inexpensive to create. ...
While a major drawback to owning a sole
proprietorship is the fact that the owner has
unlimited personal liability, there are many
benefits.

What are five advantages of sole proprietorship?
Each of these sole proprietorship benefits will be
discussed below.
•You Are in Control. Since you are the only owner of a
sole proprietorship, you are in complete control of your
business. ...
•Simplified and Less Costly Organization. ...
•Privacy. ...
•Minimal-to-No Reporting Requirements. ...
•Simplified Tax Reporting. ...
•Conclusion.

Sole proprietorship advantages include:
•Having control of your business
•A simplified and less expensive business
organization
•Privacy
•Minimal reporting requirements
•Simplified tax reporting

You Are in Control
Since you are the only owner of a sole proprietorship,
you are in complete control of your business. All of the
decisions are yours to make. You do not need to seek
the approval or consent of any partners, members,
officers, directors, or shareholders, as you would need
to do if you had a partnership, LLC, or corporation.
One question to ask yourself is: Do I want to be the
sole decision-maker, or would I be more comfortable
having one or more co-owners to help with the
decision-making?

Simplified and Less Costly Organization
There are no forms to complete, and no government
fees to pay, to form a business as a sole
proprietorship. Forming a general partnership
typically doesn't require any government forms, but it
is advisable to have a formal partnership
agreement in order to outline the rights and duties of
the partners, and to resolve any disputes that may
arise. Other forms of business organization may
require filing some federal and state government
forms, and paying significant fees.

For example, in certain situations,
a limited partnership may come under
the authority of securities laws and their
disclosure requirements. An LLC or
corporation will require formation
documents to be filed with the
appropriate state agency, and the
payment of filing fees.

If you decide to operate your sole
proprietorship under a business name
that is separate from your name
(typically called an assumed name,
a fictitious name, or a doing business
as [d/b/a] name), there usually will be a
fairly simple state government form and
a small fee to pay.

Privacy
Since a sole proprietorship does not file
any formation documents or annual reports
with the federal or state governments, your
business operations are not subject to
public disclosure like an LLC or
corporation.

Minimal-to-No Reporting Requirements
A sole proprietorship does not need to file
an annual report with the state or federal
governments. In most cases, partnerships do not
need to file an annual report; however, LLCs and
corporations will be required by law to conduct
certain meetings of members or shareholders,
and file certain reports with the state
government.

Simplified Tax Reporting
The sole proprietorship tax advantages
are simplified reporting requirements
and not having to pay separate taxes
for the business.

A sole proprietorship does not need to
file any special tax forms with the state
or federal government. Generally, the
only tax form a sole proprietor will file
with the IRS is a Schedule C (Profit or
Loss from a Business) as part of their
annual Form 1040.

With a partnership, business profits and
losses must be divided among the
partners, and reported to the IRS. All
partners must report their share of the
partnership profit or loss on their tax
returns

. With a small LLC or a corporation, you can
make an election to have the profits taxed
as if it were a sole proprietorship or
partnership. If this election is not made, the
LLC or corporation itself may need to file tax
returns (and pay a separate taxes), with the
shareholders also paying taxes on their
share of the profits.

Conclusion
Organizing your business as a sole
proprietorship has several advantages.
However, this decision should take into
consideration all of your circumstances,
including whether you will need others to
invest in your business, your personal asset
protection needs, and your tax situation.

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