If an LLC doesn't work for you, we can apply and get a sole proprietorship · Bienes Raíces

Dec '22 (edited) in Contribuciones/Conversaciones

If an LLC doesn't work for you, we can apply and get a sole proprietorship

A sole proprietorship, also known as a sole tradership, individual entrepreneurship or proprietorship, is a type of enterprise owned and run by one person and in which there is no legal distinction between the owner and the business entity. A sole trader does not necessarily work alone and may employ other people

The sole trader receives all profits (subject to taxation specific to the business) and has unlimited responsibility for all losses and debts. Every asset of the business is owned by the proprietor, and all debts of the business are that of the proprietor. It is a "sole" proprietorship in contrast with a partnership, which has at least two owners.

Sole proprietors may use a trade nameor business name other than their or its legal name. They may have to trademark their business name legally if it differs from their own legal name, with the process varying depending upon country of residence

Advantages and disadvantages

Registration of a business name for a sole proprietor is generally uncomplicated unless it involves the selection of a name that is fictitious, or “assumed”. The business owner is required to register with the appropriate local authorities, who will determine that the name submitted is not duplicated by another business entity. Furthermore, the business owner must complete a form submitted to the governing authority to acquire title as a “DBA” or "doing business as”. The authority in some US states is the Secretary of State.

The license for a sole proprietary business entitles the owner to hire employeesvand enlist the services of independent consultants. Although an employee or consultant may be requested by the owner to complete a specific project or participate in the company's decision making process, their contribution to the project or decision is considered a recommendation under the law. Under the legal doctrine Respondeat superior (Latin: "let the master answer"), the legal liability for any business decision arising from such a contribution remains upon the owner and cannot be renounced or apportioned

This is transposed by the unlimited liability attached to a sole proprietary business. The owner carries the financial responsibility for all debts and/or losses suffered by the business, to the extent of using personal or other assets to discharge any outstanding liabilities. So, the owner of a sole proprietorship may be forced to use his/her personal holdings, such as his/her car, to pay the debts. The owner is exclusively liable for all business activities conducted by the sole proprietorship and accordingly, entitled to full control and all earnings associated with it. The general aspect according to the general business law is that this type of business owner does not embody a “legal entity” Furthermore, any attempted and unreliable distinctions of the business do not change the classification under this title.

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