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Sole proprietorship is a good business organization for an individual who is starting a business and intends to keep it small. This is especially true if the owner does not have much risk of liability and does not want to have the expenses of incorporating and setting up other corporate measures.

Most small businesses start out as sole proprietorships. Owned by one person, the sole proprietor has the day-to-day responsibility for running the business. Common sole proprietorships include home businesses, part-time businesses, anddirect sellers.

Here are some of the benefits to sole proprietorship:

1. Lower Start-up Costs- Limited capital is needed to start up a small business. A lawyer is usually needed to form a corporation.

2. Autonomy- Sole proprietors make their own decisions within the boundaries of the law.

3.`Filing taxes - As a sole proprietor, filing taxes is generally easier than for a corporation.Profits from the business are reported directly on the owner's personal tax return.

4. If the time comes, the sole -proprietorship is simple to end.

5. Ease of Money Handling- Money transactions tend to be simpler for a sole proprietorship than for other legal business structures.

6. Health care reimbursement- Arrangements can be extended to your spouse, and then deducted for self-employment tax purposes as a reimbursement. This can offer significant tax savings in the long-term.

A sole proprietorship is a good business organization for someone who is starting a small business, plans to keep it small, and wants comparatively little risk and fewer start-up costs.

Learn more about this author, E.M.Robinson.
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