Lit 1 Task 1

In: Business and Management

Submitted By zashaa
Words 1754
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LIT 1 Task 1 PART A
Sole Proprietorship
Sole Proprietorship is a business owned by one person, as distinguished from a partnership or
Corporation. Sole proprietorship is a company, which is not registered with the state as a limited liability company or corporation.
Some advantages of a sole proprietorship are that they have flexibility in operations. The sole proprietorship business is undertaken on a small scale. If any change is required in the operations, it is easy and quick to bring the changes. Another advantage in this type is the ease of promptness in decision-making, autonomy. When the decision is to be taken by one person, it is guaranteed to be quick. Thus, the entrepreneur, as a sole proprietor, can arrive at quick decisions concerning the business because he does not have to ask anybody else. There is only one person that makes decisions, therefore, there is no other to criticize, or challenge a decision made. A third advantage is the simplicity of the business. Because of this, it is the most common type of business entity. The only difficulty of this business type is obtaining licenses and permits in the state of operation. If the business will be run under a different name than that of the individual who owns it, a separate special certificate must be filed. Sole Gain is seen as a highly ranked advantage because all revenue goes back to the single investor, the entrepreneur. There are no shareholders to declare dividends. The primary advantage for a sole proprietorship is the single taxation. The owner files as an individual, filing a Form 1040 and a Schedule C (Profit or Loss from Business or Profession). All profits and/or losses are reported by the individual. This is known as pass-through taxation. Along with advantages, sole proprietorship has its disadvantages. One of these disadvantages is that it has limited resources. The…...

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