Are you considering starting a sole proprietorship but not sure whether it’s the right structure? Here are some of the top benefits of a sole proprietorship.
When it comes to starting a new company, there a lot of angles and avenues you can take. While there may be benefits to utilizing other forms of business organization, it can be rewarding to go at it on your own and file as a ‘sole proprietorship.’
If you’re handling your business enterprise on your own, there are many reasons why filing in this way can advantageous to you. Things can be simpler, cheaper, and more empowering if you decide to organize in this way.
What are the benefits of a sole proprietorship, and how does it all work? Read on and we’ll walk you through what you need to know.
Complete Control
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When you file as a sole proprietor, you are setting up a system in which you are in complete control of your company. That means you don’t have to go through the red-tape process of getting consent from partners, shareholders, or any other individuals. If you were to file as a partnership, LLC, or corporation, this could become a necessary step in your process.
Filing as a sole proprietorship ensures you retain full control of your company with no distractions or second opinions.
You’ll also have less possible oversight from the higher powers that be as well. Unlike other forms of business organization, a sole proprietorship does not require you to file any formal documents to the state or federal government. You will also not be required to send in any annual reports documenting your spendings and earnings.
You are free to operate as you see fit without the need for oversight.
Easier To Do Taxes
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One thing many small business owners struggle with is tax season. Business taxes can be quite complicated to work through. Luckily, filing as a sole proprietorship has a number of tax advantages.
There are many simplified reporting requirements when you are organized in this fashion. For one, you likely won’t have to pay separate taxes for your business. You also won’t have to file any specialized tax forms with the government. In most cases, you will only need to add a Schedule C to your normal annual tax return.
If you pay yourself through the business, just ensure you’re keeping track of these payments. Using a service like Paystub Creator can ensure you always have the paperwork to back up what you need to.
More Affordable To Organize
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When you organize your business as a partnership or an LLC, there are a lot of costs involved. You have to put in applications with the local government, and often these applications come with fees that can be quite expensive.
Sole proprietorships don’t have to file with the government, as we previously mentioned. That means not only do you get to skip the hassle of that process, but you get to keep a good amount of money in your pocket as well.
Benefits of a Sole Proprietorship
There are many benefits of a sole proprietorship that new business owners should consider. If you want to save time and money, this form of business organization might be the way to go.
Need more advice for your small business? Check out our blog for more.