Sole Proprietorship
What is it? A business owned and managed by one person (or for tax purposes, a husband and wife). For IRS purposes, a sole proprietor and her business are one tax entity, meaning that business profits are reported and taxed on the owners personal tax return. Setting up a sole proprietorship is cheap and easy since no legal formation documents need be filed with any governmental agency (although tax registration and other permit and license requirements may still apply). Once you file a fictitious name statement (assuming you dont use your own name) and obtain any required basic tax permits and business licenses, youll be in business. The main downside of a sole proprietorship is that its owner is personally liable for all business debts.Added By: Jake
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