What is a sole proprietorship?

A sole proprietorship company is the company or a person who decided not to carry his business as a separate legal entity, such as the corporation, partnership or limited liability company. This kind of business is not a separate entity. Anytime someone regularly provides services for a fee, selling things at a flea market or participate in any commercial activity whose main goal is to make a profit, that person is a sole proprietor. If they focus on the business of making profits or income, the IRS requires that you file a separate appendix C "Profit or loss of business one" to your annual personal income tax return. Appendix C summarizes your income and expenses of your proprietorship.

As the sale business owner, you have unlimited liability, which means that if your company can't pay all it passive, creditors including your company needs money can come after your personal assets.Many part-time entrepreneurs don't know this, but it is a huge financial risk u.s. ' they are prosecuted or unable to pay their bills, are personally responsible for the debts of the company.

A sole proprietor business has no other owners prepare financial statements, but the owner must prepare these statements about how his company is still.Banks usually the financial statements of individual entrepreneurs who apply for loans require.A partnership shall keep an account of capital or property separate for each partenaires.Le total profit of the company is allocated in these accounts of capital, as set out in the partenariat.Bien agreement only owners have invested capital steps separate from retained earnings, as do the companies, they should always keep these two separate accounts for equal owners - not only to follow the company, but for the benefit of any future buyers of the company.