 |
| Companies law |
|---|
| Company · Business |
| Sole proprietorship |
| Partnership (General · Limited · LLP) |
| Corporation |
| Cooperative |
| United States: |
| S corporation · C corporation LLC · LLLP · Series LLC Delaware corporation Nevada corporation Business trust |
| UK/Ireland/Commonwealth: |
| Limited company (By shares · By guarantee) (Public · Proprietary) Community interest company |
| European Union/EEA: |
| SE · SCE |
| Other countries: |
| AB · AG · ANS · A/S · AS · GmbH |
| K.K. · N.V. · OY · S.A. · Full list |
| Doctrines |
| Corporate governance |
| Limited liability · Ultra vires |
| Business judgment rule |
| Internal affairs doctrine |
| De facto corporation and corporation by estoppel |
| Piercing the corporate veil |
| Rochdale Principles |
| Related areas of law |
| Contract · Civil procedure |
A sole proprietorship, or simply proprietorship (British English: sole trader) is a type of business entity which legally has no separate existence from its owner. Companies law (or the law of business associations) is the field of Law concerning business and other organizations Generally a company is a form of Business organization. The precise definition varies A business (also called firm or an enterprise) is a legally recognized organizational entity designed to provide goods and/or services to For partnership in cricket terminology see List of cricket terms A partnership is a type of Business entity in which partners In the commercial and legal parlance of most countries a general partnership or simply a Partnership, refers to an association of persons or an unincorporated A limited partnership is a form of Partnership similar to a General partnership, except that in addition to one or more general partners (GPs there are A limited liability partnership (abbreviated as LLP) has elements of Partnerships and Corporations. A corporation is a separate legal entity usually used to conduct business An S corporation or S-corp, for United States federal income tax purposes is a Corporation that makes a valid election to be taxed under Subchapter S of A C corporation (or C corp) is a Corporation in the United States that for Federal income tax purposes, is Taxed under and Subchapter C ( et A limited liability company (abbreviated LLC or LLC) in the law of the vast majority of the United States is a legal form of business Company The limited liability limited partnership (LLLP is a relatively new modification of the limited partnership a form of Business entity recognized under U A Series LLC is a special form of a Limited liability company that provides liability protection across multiple "series" each of which is theoretically protected A Nevada Corporation is a Corporation chartered under the Laws of the U A Massachusetts business trust or MBT is a legal trust set up for the purposes of business but not necessarily in the state of Massachusetts. A limited company in the United Kingdom is a Corporation whose liability is limited by law A private company limited by shares is a type of company incorporated under the laws of England and Wales, Scotland, that of certain Commonwealth countries In British or Irish Company law, a company limited by guarantee is an alternative type of Corporation used primarily for Non-profit A Public Limited Company ( PLC, plc or plc or p l c is a type of Limited company in the United Kingdom or the Republic of Ireland which is A proprietary company is a form of Corporation in Australia that is limited by Shares. A community interest company (CIC is a new type of company introduced by the United Kingdom government in 2005 under The Community Interest Act 2004, designed The European Economic Area ( EEA) came into being on 1 January 1994 following an agreement between member states of European Free Trade Association (EFTAthe The Council Regulation on the Statute for a European Company of the European Union was adopted October 8 2001. TemplateExpert and TemplateExpert-subject, has been modified to include two WikiProjects and Portals (Expert-subject is limited to Aktiebolag (literally " share Company " or " Stock Company " is the Swedish term for " Limited Aktiengesellschaft ('aktsiəngəzεlʃaft abbreviated AG) is a German term that refers to a Corporation that is limited by shares i An ansvarlig selskap is a Norwegian personal responsibility Company model mainly used in small-to-medium businesses which translates directly into "Responsible An Aktieselskab (abbreviated A/S) is the Danish name for a Stock -based Corporation. Aksjeselskap is the Norwegian term for a Stock -based Company. Gesellschaft mit beschränkter Haftung ( GmbH) is a type of legal entity very common in Germany (where it was created in 1892 Austria nl '''''Naamloze Vennootschap''''' (usually abbreviated NV) is the Dutch term for a Public Limited liability Corporation. Osakeyhtiö, literally a " stock company " is the Finnish equivalent of a Limited company ( Ltd or LLC) or Gesellschaft For the art organization see Société Anonyme (art SA generally designates Corporations in various countries mostly those employing There are many types of business entity defined in the legal systems of various countries Corporate governance is the set of Processes customs Policies, laws and institutions affecting the way a Corporation is directed administered or controlled Limited liability is a concept whereby a person's financial Liability is limited to a fixed sum most commonly the value of a person's investment in a company or partnership Ultra vires is a Latin phrase that literally means "beyond the powers" The business judgment rule is an American Case law -derived concept in Corporations law whereby the "directors of a corporation. The internal affairs doctrine is a Choice of law rule in Corporations law. De facto corporation and corporation by estoppel are both terms that are used by Courts to describe circumstances in which a business organization that has The corporate law concept of piercing (lifting the corporate veil describes a legal decision where a shareholder or director of a Corporation is held liable for the The Rochdale Principles are a set of ideals for the operation of Cooperatives. A contract is an exchange of promises between two or more parties to do or refrain from doing an act which is enforceable in a court of law Civil procedure is the body of law that sets out the process that Courts will follow when hearing cases of a civil nature (a " Civil action " as opposed to British English or UK English ( BrE, BE, en-GB) is the broad term used to distinguish the forms of the English language used in the A business (also called firm or an enterprise) is a legally recognized organizational entity designed to provide goods and/or services to Note This Wikipedia entry deals with the legal concept legal person. Hence, the limitations of liability enjoyed by a corporation and limited liability partnerships do not apply to sole proprietors. Limited liability is a concept whereby a person's financial Liability is limited to a fixed sum most commonly the value of a person's investment in a company or partnership A corporation is a separate legal entity usually used to conduct business A limited liability partnership (abbreviated as LLP) has elements of Partnerships and Corporations. All debts of the business are debts of the owner. Debt is that which is owed usually referencing Assets owed but the term can cover other obligations It is a "sole" proprietor in the sense that the owner has no partners. For partnership in cricket terminology see List of cricket terms A partnership is a type of Business entity in which partners A sole proprietorship essentially means a person does business in his or her own name and there is only one owner. In Jurisprudence, a natural person is a human being perceptible through the senses and subject to physical laws as opposed to an artificial legal or juristic person A sole proprietorship is not a corporation; it does not pay corporate taxes, but rather the person who organized the business pays personal income taxes on the profits made, making accounting much simpler. Corporate tax refers to a Tax levied by various jurisdictions on the Profits made by companies or associations. Accountancy or accounting is the measurement statement or provision of assurance about financial information primarily used by Lenders managers, A sole proprietorship need not worry about double taxation like a corporate entity would have to. Double taxation is the imposition of two or more Taxes on the same income (in the case of income taxes) Asset (in the case of capital taxes) Generally a company is a form of Business organization. The precise definition varies
A sole proprietor may do business with a trade name other than his or her legal name. A trade name, also known as a trading name or a business name, is the name which a Business trades under for commercial purposes although its registered In some jurisdictions, for example the United States, the sole proprietor is required to register the trade name or "Doing Business As" with a government agency. The Phrase " doing business as " (abbreviated DBA or d/b/a) is a legal term, meaning that the Name of the business or operation This also allows the proprietor to open a business account with banking institutions.
Advantages
An entrepreneur may opt for the sole proprietorship legal structure because no additional work must be done to start the business. In most cases, there are no legal formalities to forming or dissolving a business. A sole proprietor is not separate from the individual; what the business makes, so does the individual. At the same time, all of the individual's non-protected assets (e. g homestead or qualified retirement accounts) are at risk. There is not necessarily better control or business administration possible with a sole proprietorship, only increased risks. For example, a single member corporation or limited company still only has one owner, who can make decisions quickly without having to consult others.
In the United States a sole proprietorship has the option of buying health care for self-employed persons, such as a Health Savings Account. The United States of America —commonly referred to as the A Health Savings Account (HSA is a tax-advantaged medical savings account available to taxpayers in the United States who are enrolled in a High Deductible Health
Furthermore, in most jurisdictions, a sole proprietorship files simpler tax returns to report its business activity. Typically a sole proprietorship reports its income and deductions on the individual's personal tax return. In comparison, an identical small business operating as a corporation or partnership would be required to prepare and submit a separate tax return. A sole proprietorship often has the advantage of the least government regulation.
Disadvantages
A business organized as a sole trader will likely have a hard time raising capital since shares of the business cannot be sold, and there is a smaller sense of legitimacy relative to a business organized as a corporation or limited liability company. Software for Fixed assets management and Stock control developed in 2004. A limited liability company (abbreviated LLC or LLC) in the law of the vast majority of the United States is a legal form of business Company It can also sometimes be more difficult to raise bank finance, as sole proprietorships cannot grant a floating charge which in many jurisdictions is required for bank financing. A floating charge is a Security interest over a fund of changing assets of a company or a Limited liability partnership (LLP which 'floats' or 'hovers' Hiring employees may also be difficult. Employment is a Contract between two parties, one being the employer and the other being the employee. This form of business will have unlimited liability, so that if the business is sued, the proprietor is personally liable. In law a lawsuit is a civil action brought before a Court in which the party commencing the action the Plaintiff, seeks a legal or equitable remedy The life span of the business is also uncertain. As soon as the owner decides not to have the business anymore, or the owner dies, the business ceases to exist.
In countries without universal health care, such as the United States, a sole proprietor is also responsible for his or her own health insurance, and may find difficulty finding any if one of the family members to be covered has a previous health issue. Universal health care is health care coverage which is extended to all eligible residents of a governmental region
Another disadvantage of a sole proprietorship is that as a business becomes successful, the risks accompanying the business tend to grow. To minimize those risks, a sole proprietor has the option of forming a corporation. In the United States, a sole proprietor could also form a limited liability company, or LLC, which would give the protection of limited liability but would still be treated as a sole proprietorship for income tax purposes. A limited liability company (abbreviated LLC or LLC) in the law of the vast majority of the United States is a legal form of business Company
There are more than 23. 5 million business firms in the US today. Of these, more than 18 million are small businesses owned by one person.
References
- Hamilton, Robert W. , and Jonathan R. Macey, Cases on Corporations Including Partnerships and Limited Liability Companies, 9th Ed. , West Group, 2005.
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