What is a sole proprietorship?

A sole proprietorship is the business or a person who has decided not to take your business as a separate legal entity such as a partnership company, partnership or limited liability company. This type of business is not a separate entity. Each time a person regularly provides services for a fee, sells things at a flea market or participate in a core activity which aims to make a profit, that person is a sole proprietor. If they operate in a profit or income goal, the IRS requires that you file a "Profit or loss from a business" separate annex with your annual tax return C. Appendix C summarizes your income and expenses from your own business.
As the owner sold a business, you have unlimited liability, which means that if your company can not pay all the debts that the creditors to whom the business owes money can come after your personal assets. Many part-time entrepreneurs may not know this, but it is a huge financial risk. If they are sued or can not pay their bills, they are personally liable for the debts of the company.
A sole proprietorship has no other owners to prepare financial statements for the year, but the owner must still prepare these statements to know how your business is doing. Banks usually require financial statements of individual entrepreneurs seeking loans. A company must maintain a capital account or the separate property for each partner. The total profit of the company is assigned to these capital accounts, as described in the Partnership Agreement. Although individual companies do not have the capital invested separate undistributed corporate profits as do, you should always keep these two accounts separate own funds - not only to continue the business, but for the benefit of all buyers potential of the company ....