Sole Business Owner
Sole business owner is the simplest way of running a business. This is because there is no other person who will keep the business going except for the owner.
Likewise, it is very simple to manage and control a sole proprietorship business.
Being a sole business owner means that the business is inseparable to the owner. They are considered as the same entity in such a way that the owner has the full control in running the business in terms of its finances, operations as well as legal aspects. However, being a sole business owner, the taxes of the business is dependant on the personal income tax of the owner. Nevertheless, it is an ideal business organization to consider when starting a business as it does not require exposure to liability.
Points to Consider
If you want to start a business like a sole business owner you should consider some pointers that would help you establish the business easily. Apparently, starting this type of business is very easy as there are no formal requirements needed. The owner will be the one to decide about the business and the profits of the business as well as the losses are directly reported to the income tax return of the owner. Likewise, starting this kind of business is not expensive as it only requires minimal start up costs. Nevertheless, being a sole business owner entails unlimited liability both on the personal and business assets. Likewise, the business usually terminates in case the owner retires, dies or become disabled. This means that the sole business could not exist perpetually and lacks continuity. The drawback of this business organization is that the financial resources are limited only to the funds of the owner as well as lenders.
On the other hand, in terms of the accounting of capital the sole proprietorship have separate books of account. The owner has separate book of accounts from the business in such a way that the business transactions will be identified from the personal undertakings. Likewise, the owner has the authority to bind into contract in behalf of the business. In this sense, the approval of the contract depends on the business owner.
Nevertheless, the life expectancy of a sole business depends on the life of the owner. As mentioned earlier, the business operation usually terminates depending on the discretion of the owner. This means that when the sole business owner decides to cease the business it would be possible. That is why when you are planning to start a business you should understand first the attributes of sole business ownership such as the creation, profits, liabilities, capital, financing, duration, and transfer of ownership, taxation, reporting requirements as well as management and control. You can hire a lawyer and accountant to help you understand how sole business ownership works.