Sole Proprietorship

Sole Proprietorship: This type of organization is the simplest form of business structure, or more appropriately, the lack of business structure. In a Sole-Proprietorship, the owner is personally liable for all debts incurred by the business and is likewise entitled to all profits derived from the business. There are no formalities to creating a sole-proprietorship other than commencing business; however it is usually wise to file a fictitious name with the Secretary of State. A separate income tax filing is not required as all income (loss) is reported on Schedule C of the owner’s 1040 form. The income generated by the sole proprietorship is subject to self-employment taxes.