In this episode, I talked about Sole Proprietorship companies and what are the advantages and disadvantages of owning sole proprietorship company.
I also give an example of multinational companies who started as sole proprietorship and become an empire.
I know your time is very valuable. So, I focused to make it short and to the point.
If you have any question or have a feedback, please contact me. Let me know what do you think :))

Like and Subscribe to my podcast. 

________________________________________________________________
Sole proprietorship
Sole proprietorship is the simplest business structure that is formed by one person as sole proprietor. Business can start with sole proprietorship and move to a company status in the future. Sole proprietorship can be formed by more than one person as a partnership. Which means that all owners are liable for the company debt and can’t be protected. For partnership income tax, each person can tax his or her own tax depending one the owning persentage.
Advantage of Sole Proprietorship:

You are in control of 100% of the business.
Simple to register as a sole proprietorship company which you can own by one owner.
Less expensive and little capital needed to form the company.
Trade under your name or company name.
Use your SSN when you file tax and you are not required to have EIN
Easy  to transfer the business ownership to another person.
You can put your business on hold at any time.

Disadvantage of Sole Proprietorship:

Unlimited liability for business debt or if you get sued. Because there is no separation between the owner and business.
It is challenging to raise money when you need it and bankers won’t lend money easily to solepropritorship because of the risk that when business fails, no one will pay the debt.
It is hard to sell the business as a whole but you can sell the asset separately. Because not a lot of buyers are interested in buying your company and keeping it running.

Here are some example of company started as sole proprietorship and partnership to multinational companies:
Richard Branson started as a sole proprietorship that expand into Virgin empire
Steve Jobs and Steve Wonzinak: partnership that created Apple company.
John Willard Marriott, Sr started A&W as a sole proprietorship
Key Terms:

Sole Proprietorship: is an individual who is the only owner of the business.
Partnership: two or more individuals who own a business
EIN: Employer Identification Number and it is nine digit number issued by IRS for tax purpose
Entity: an organization that is formed by an individual or individuals to conduct business.

Q&A:
What is Sole proprietorship?
It is an individual who is the only owner of the business.
Can you hire an employee if you are a sole proprietorship company?
Yes, you can hire employees if you are sole proprietorship
Do you have to have a physical location?
You do not need a physical location such as a store. You can use your own home to do that.

Hope this can help. :)

Ver todos los episodios