S&P's Financial Focus

Sole Proprietorship

Owning your own business sounds exciting. You can set your own hours, receive all the profits, even have tax benefits in the form of business deductions. So why doesn't everyone set up a sole proprietorship? The reason is that working for yourself isn't as easy as it may seem and there also are liabilities connected with owning your own business.

Make a Wall Poster Take a look at both the disadvantages and the advantages and then ask yourself if a sole proprietorship is for you. Make a wall poster of the advantaged and disadvantages.

Advantages

Easy and inexpensive to create

Owner has complete authority over all business transactions

Owner receives all the profits

Least regulated form of business ownership

Business itself pays no taxes, because it is not separate from the owner; business is taxed at the personal rate of the owner, which may be lower than the corporate tax rate

Disadvantages

Owner has unlimited liability, or full responsibility for all debts and actions of the business

Owner is personally responsible for all debts of the business

Owner's personal items may be used to pay any debts incurred by the business

Raising capital may be more difficult than for corporations

Business may be dissolved at the death of the owner

Business is limited to the skills and abilities of the owner

Standard and Poor’s publishes the globally recognized S&P 500® financial index and provides credit ratings. It also gathers financial statistics, information, and news, and analyzes this data to help individuals, companies, and governments make financial decisions. Go to www.standardandpoors.com to learn more about this company.