Review common business structures

Sole proprietorship

A sole proprietorship is easy to form and gives you complete control of your business. You’re automatically considered to

be a sole proprietorship if you do business activities but don’t register as any other kind of business.

Sole proprietorships do not produce a separate business entity. This means your business assets and liabilities are not

separate from your personal assets and liabilities. You can be held personally liable for the debts and obligations of

the business. Sole proprietors are still able to get a trade name. It can also be hard to raise money because you can’t

sell stock, and banks are hesitant to lend to sole proprietorships.

Sole proprietorships can be a good choice for low-risk businesses and owners who want to test their business idea before

forming a more formal business.

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