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that can only be created by a statutory authorization and its charter is issued by state.

Some of the characteristics of a sole proprietor are; the business can be created by desire its legal position and is not separate because the owner is the business and the business operates with unlimited liability, unlike a corporation which has limited liability.

With a sole proprietor the business duration is determined by the owner or ends at owner's death, a corporation can go on forever or with a partnership which can only be terminated by agreement, death, bankruptcy, or withdrawal of a partner.

With a sole proprietor business you are able to manage the company how you want, there are no organizational fees, and generally no limitation of conducting business in other states, taxes are paid on business income, and you can sell your business and transfer your interest at will. Partnerships and corporations have to go along with the partners' voices or shareholders, and with a franchise there are rules for you to follow.

The tax class of the sole proprietor is the simplest of all the business entities. Because the owner is not an employee of the business the owner pays self-employment tax and income tax in the form of estimated tax payments which are due every quarter with the first payment due in April. Along with annual the 1040 tax form, the sole proprietor would file schedule C, this is where the business income and expense are reported, and a schedule SE which reports self-employment taxes. A corporation has double taxation and a partnership pays on their share of profits whether or not they were distributed.

Being your own boss can be rewarding, but it takes a lot of hard work. It is not enough just knowing how to make a product, you have to know how to run a business from the inside and out, that is the only way to become a successful sole proprietor.

Works Cited:

Jenta, Gaylord A., Miller, Roger Leroy, and Cross, Frank B., "West's Business Law Alternative Edition" Seventh Edition West Education Publishing Company Copyright 1999

Learn more about this author, Jeanie Pitner.
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