Why do people prefer establishing a sole proprietorship but not a partnership?

September 11, 2019

Because  it is the easiest type of business to start, since most states do not require sole proprietors to register their business with their Secretary of State. Another obvious bonus is that you have no one to answer to but yourself, having the ability to set your own work schedule and routine. And also don’t have to share profits with anyone. One of the functional advantages of sole proprietorship is that they are easier to set up than other business entities. A person becomes a sole proprietor simply by running a business. Sole proprietorship also have tax advantages over other business entities. In income tax law, sole proprietorship do not require separate tax filings. Instead, an owner reports the net income or net loss from the business on his personal income tax form.
In addition to simplicity, this also avoids the owner from incurring “double taxation” on business income, as in a corporation.
A sole proprietorship is dissolved when the owner stops doing business. This can occur if the owner sells the business, passes away and leaves the business to his heirs, or simply closes the business.

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