SOLE PROPRIETORSHIPS

Sole Proprietorships

Legal and Ethical Environment of Business (Sole Proprietorships)

Introduction

The course of the study will focus on the concept of “a sole proprietorship” and its different aspects in detail. The study will include the pros and cons of a sole proprietorship along with the risk involved in it. The dos and don'ts of the “sole Proprietorship” are discussed in order to be a wealthy proprietor. Relevant example of the successful proprietors and those who failed will be discussed. A part of the paper will also constitute about the ethical concerns related to the sole proprietorship. The sole proprietorship is the simplest form of company. In which a single person starts a business that alone without involving other people (as shareholders) is self-employed and for, its activity, including any corporation is a sole proprietor. The operator of a sole proprietorship is also called the owner.

Discussion

A sole proprietorship is the simplest and most common legal form of a company. Any professional or professionals who only opens a business, initially corresponds to this legal form. In order to establish a sole proprietorship, the owner of the company requires going the commercial registrar, trade office and applying for the tax number (Jeremy, 2004). It is important that only one person, who is the owner and accepts complete liability of the business. If the sole proprietorship has more than one owner, then it would be considered a general partnership. Similarly, if a micro-business is necessarily the duty-free basis in the VAT, an independent company may also qualify for this plan if it meets the thresholds for micro-enterprises (Jeremy, 2004). An individual entrepreneur often has a choice of micro-business or sole proprietorship under the scheme of reality. So this is only here to study the characteristics of this legal regime. When the entrepreneur is the sole provider of capital, it created a sole proprietorship.

Principles of Sole proprietorship

A sole proprietorship can be commercial or civil; will depend on the nature of its activities. The creator of a sole proprietorship has only one property and one. The result is undefined liability for debts incurred during his professional activity, including any property intended for personal use. From a social point of view, the individual entrepreneur will be subject to the system of social private persons. Upon termination of activity, it cannot receive unemployment benefits. From a tax perspective, it will be subject to tax on income, BIC (business profits) or BNC (non-commercial profits) as appropriate. Its creation requires only registration in the Trade and Companies (RCS) or the directory of trades and no minimum capital is required (since the individual firm does not own assets).

The steps to create a sole proprietorship are simplified and less expensive than in the creation of a profitable company. Similarly, the accounting can be simplified. However, as noted above, the simplified regimes (that of micro-enterprises) are not necessarily the most financially advantageous for the company (Jeremy, 2004). The contractor is personally liable for debts incurred for its activity, if it has some peculiar property; ...