Oakley Utah business lawyer for contractor

 

Oakley Utah

Corporate Counsel

 

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What is a Business Lawyer and Why Do I need one?

A business lawyer is an attorney who focuses his or her legal practice on issues that affect businesses, such as starting a business, business contracts, taxation, and intellectual property.

Business lawyers typically work with business owners and entrepreneurs start and grow their business.

Types of Business Lawyers

Business lawyers who practice law can be divided into two general categories: transactional business lawyers who focus on contractual work and litigation business lawyers who focus on trial work.

Transactional business lawyers frequently spend the better part of their day talking with clients, negotiating contracts with lawyers representing other companies, and drafting contracts and other documents, such as independent contractor agreements, physician employment contracts, and the like.

Most of transactional business lawyer’s time is spent in their offices and with clients, never in the courtroom. Transactions lawyers also give clients advice on regulatory issues as well as prepare documents required by regulatory agencies, such as the the IRS.

Business trial lawyers focus on disputes between businesses that end up in court. They act just as any civil trial lawyer does, except that they litigate business issues, such as breach of a contract, rather than criminal law or personal injury.

Business trial lawyers’ days are often filled with meeting clients, conducting depositions, drafting legal documents like motions and pleadings, and appearing in court for trial, motion hearings, or arbitrations (which are trials but conducted in front of a panel of lawyers or an independent hearings officer).

What Does a Business Lawyers Do

A business lawyer can help you make decisions for your business regarding a wide variety of areas including business formations, contract negotiations, employment and labor laws, and litigation.

Basically, a business lawyer can help you form and incorporate your business, be sure that it’s legal and compliant as it grows, and help you with anything that should come up in the form of contracts, litigation, and hiring individuals as you grow.

How Can A Business Lawyer Help a Business?

A business lawyer can help a business at any stage, from the beginning and on.

In the beginning stages of a business, you may want a business lawyer to advise you about what type of business you should form and help you look at the unique advantages and disadvantages of each.

Once you decide which type of business to form, your business lawyer will file the required papers to your state, city, and county as applicable to make sure your business is legal and compliant.

Once your business is formed, a business lawyer can help you with contracts, hiring help, and any litigation issues that may arise.

If you have questions concerning how a business lawyer can help you, don’t hesitate to contact me Sam Mollaei, Esq., Business Lawyer, at sam@mollaeilaw.com or at (818) 925-0002 about my services.

How Do I Get A Business Lawyer?

Once you decide to hire a business lawyer, you should contact them to discuss their services and what you’re looking for. Many offer a free consultation, which is helpful session to learn more about the lawyer and how they work.

You can set up a free consultation with top business attorneys today by calling 1-800-564-2707. We encourage you to ask any questions you may have at that time to help you make a hiring decision.

How Much Does a Business Lawyer Cost

A business lawyer cost depends on the lawyer -- you can typically expect a lawyer to charge flat-rate or hourly. Typically, you'd want to work with a business lawyer that charges a flat-hour fee upfront.

A business lawyer usually bills in a flat-rate or hourly, depending on the specifications of the work.

A fixed or flat fee is simply a pre-arranged total fee that is paid upfront to complete all work required for a particular legal matter.

On your free consultation call, you can ask our attorneys how much a service costs upfront before the service starts. I can give you a quote ahead of time that outlines the charges and any fees you need to be aware of before you sign any contract.

The free consultation call is also helpful to learn about how the lawyer charges and you can ask for a typical fee range so you can plan ahead and determine how much to budget for in order to hire your business lawyer.

How To Find Business Lawyer We are your best resource for finding an affordable and knowledgeable business lawyer to help you with your business.

We specialize in business law working with business owners and entrepreneurs.

How To Get a Business Lawyer

When you’re ready to hire a business attorney for your business law needs, we have several ways you can get the process started.

One option is to call us directly at 1-800-564-2707 to setup your free consultation and from there you can hire us for your legal needs.

Should I Use A Business Lawyer

That depends on what you are trying to achieve. There are some things you may feel comfortable tackling on your own such as writing a business plan or choosing a name for your business. On the other hand, there are some matters that are best handled with the help of a lawyer.

Some of the issues that you should hire a business lawyer for are making sure your business is compliant with all state, city, and county laws around owning and operating a business, dealing with any lawsuits, and negotiating the sale of your company or purchase of another company.

The above list are just a few examples and are certainly not an exhaustive list. If you have question whether you should hire a lawyer to help you, you probably should go ahead and hire one.

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Payson Utah lawyer for financial planner

 

Payson Utah

Lawyer for Starting a Business

 

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When to Hire a Business Lawyer

There are two professionals every business will need early on: an accountant and a lawyer. The reasons for hiring an accountant are pretty obvious--you need someone to help you set up your "chart of accounts," review your numbers periodically, and prepare all of your necessary federal, state and local tax returns. The reason for hiring a business attorney may not, however, be so apparent. A good business attorney will provide vital assistance in almost every aspect of your business, from basic zoning compliance and copyright and trademark advice to formal business incorporation and lawsuits and liability. First, some general rules about dealing with lawyers:

If you are being sued, it's too late. Most small businesses put off hiring a lawyer until the sheriff is standing at the door serving them with a summons. Bad mistake. The time to hook up with a good business lawyer is before you are sued. Once you have been served with a summons and complaint, it's too late--the problem has already occurred, and it's just a question of how much you will have to pay (in court costs, attorneys' fees, settlements and other expenses) to get the problem resolved. America's judicial system is a lot like a Roach Motel--it's easy to get into court, but very difficult to get out once you've been "trapped." Most lawyers agree that while nobody likes to pay attorneys' fees for anything (heck, let's let our hair down--nobody likes paying or dealing with lawyers, period), but the fee a lawyer will charge to keep you out of trouble is only a small fraction of the fee a lawyer will charge to get you out of trouble once it's happened.

Big firm or small firm? Generally speaking, the larger the law firm, the greater the overhead, therefore the higher the hourly rates you will be expected to pay. Still, larger firms have a number of advantages over smaller ones. Over the past 20 years, lawyers have become incredibly specialized. If you use a solo practitioner or small firm as your lawyer(s), it's likely that they will not have all the skills you may need to grow your business. I don't know of any solo practitioner, and very few small firms (under 10 lawyers) that could handle your lawsuits, negotiate your lease of office or retail space, file a patent or trademark, draft a software license agreement, advise you on terminating a disruptive employee, and oversee your corporate annual meeting. Sooner or later, these "generalists" will have to refer you out to specialists, and you will find yourself dealing with two or three (or even more) attorneys. While larger firms are more expensive to deal with, they have two significant advantages: 1) they usually have all the legal skills you need "under one roof," and 2) they have a lot of clout in the local, regional and (perhaps) national legal community. A nasty letter from a "powerhouse" law firm with offices in 30 states is a lot more intimidating than a nasty letter from a solo practitioner who is not admitted to practice in the defendant's state. Also, being connected with a large, well-established law firm may have intangible benefits--they may be willing to introduce you to financing sources or use their name as a reference when seeking partnership arrangements. Certainly if you run a fast-growing entrepreneurial company that plans to go public (or sell out to a big company) some day, you would need to work with lawyers whose names are recognized in the investment banking and venture capital communities.

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Salem Utah business attorney for medical company

 

Salem Utah

Business & Corporate Law Attorney

 

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Do I Need an LLC (limited liability company)

Slowly becoming more as a standard for businesses, a Limited Liability Company (or LLC) is a hybrid business form which combines the liability protection of a corporation with the tax treatment and ease of administration of a partnership.

The LLC is America’s newest form of business organization and is the most popular form of business.

The "owners" of an LLC are referred to as "members." Depending on the state, the members can consist of a single person, two or more people, corporations or other LLCs.

Unlike shareholders in a corporation, LLCs are not taxed as a separate business entity. Instead, all profits and losses are "passed through" the business to each member of the LLC. LLC members report profits and losses on their personal federal tax returns, just like the owners of a partnership would.

In other words, in the eyes of the government, an LLC is not a separate tax entity, so the business itself is not taxed. Instead, all federal income taxes are passed on to the LLC's members and are paid through their personal income tax. While the federal government does not tax income on an LLC, some states do, so make sure to check with your state's income tax agency.

Since the federal government does not recognize LLC as a business entity for taxation purposes, all LLCs must file as a corporation, partnership, or sole proprietorship tax return.

LLCs that are not automatically classified as a corporation can choose their business entity classification. To elect a classification, an LLC must file Form 8832. This form is also used if an LLC wishes to change its classification status.

Disadvantages of Limited Liability Company (LLC)

More expensive to form than sole proprietorships and general partnerships.

Ownership is typically harder to transfer than with a corporation.

Limited Life - In many states, when a member leaves an LLC, the business is dissolved and the members must fulfill all remaining legal and business obligations to close the business. The remaining members can decide if they want to start a new LLC or part ways. However, you can include provisions in your operating agreement to prolong the life of the LLC if a member decides to leave the business.

Also, because the LLC is a newer business type, there is not as much case law to rely on for determining precedent.

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Croydon Utah lawyer for financial planner

 

Croydon Utah

Outside General Counsel

 

lawyer for business lawsuits

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Do I Need an LLC (limited liability company)

Slowly becoming more as a standard for businesses, a Limited Liability Company (or LLC) is a hybrid business form which combines the liability protection of a corporation with the tax treatment and ease of administration of a partnership.

The LLC is America’s newest form of business organization and is the most popular form of business.

The "owners" of an LLC are referred to as "members." Depending on the state, the members can consist of a single person, two or more people, corporations or other LLCs.

Unlike shareholders in a corporation, LLCs are not taxed as a separate business entity. Instead, all profits and losses are "passed through" the business to each member of the LLC. LLC members report profits and losses on their personal federal tax returns, just like the owners of a partnership would.

In other words, in the eyes of the government, an LLC is not a separate tax entity, so the business itself is not taxed. Instead, all federal income taxes are passed on to the LLC's members and are paid through their personal income tax. While the federal government does not tax income on an LLC, some states do, so make sure to check with your state's income tax agency.

Since the federal government does not recognize LLC as a business entity for taxation purposes, all LLCs must file as a corporation, partnership, or sole proprietorship tax return.

LLCs that are not automatically classified as a corporation can choose their business entity classification. To elect a classification, an LLC must file Form 8832. This form is also used if an LLC wishes to change its classification status.

Disadvantages of Limited Liability Company (LLC)

More expensive to form than sole proprietorships and general partnerships.

Ownership is typically harder to transfer than with a corporation.

Limited Life - In many states, when a member leaves an LLC, the business is dissolved and the members must fulfill all remaining legal and business obligations to close the business. The remaining members can decide if they want to start a new LLC or part ways. However, you can include provisions in your operating agreement to prolong the life of the LLC if a member decides to leave the business.

Also, because the LLC is a newer business type, there is not as much case law to rely on for determining precedent.

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Kamas Utah local business attorneys

 

Kamas Utah

Independent Contractor Agreement Lawyer

 

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Sole Proprietorship - Simplest business structure, no filing requirements, but no personal liability protection

Partnership - Created automatically when 2 more persons engage in a business. By default, a business that begins with a verbal agreement or handshake is considered a general partnership. All partners share in both the day-to-day management and business profits. However, I highly advise using a written partnership agreement to form a partnership.

Limited Liability Company - A standard for most small businesses and online businesses. Features limited liability which means the owners of an LLC have no personal liability for the obligations of the LLC. An LLC is the entity of choice for a businesses seeking to flow through losses to its investors because an LLC offers complete liability protection to all its members.

C-Corporation - A corporation is an independent legal entity owned by its shareholders. This means that the corporation itself, not the shareholders that own it, is held legally liable for the actions and debts the business incurs. Also feature Corporate Tax Treatment meaning that corporations file taxes separately from their owners

S-Corporation - Pretty much the same as a C-Corporation + some tax benefits. Also, Profits and losses can pass through to your personal tax return. This means that the business is not taxed itself, only the shareholders are taxed.

When you need the best corporate lawyer call 1-800-564-2707. legal advice for business

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Hooper Utah lawyer for company

 

Hooper Utah

Business Lawyer: Yes, You Do Need to Hire One Immediately

 

lawyer for business lawsuits

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Sole Proprietorship - Simplest business structure, no filing requirements, but no personal liability protection

Partnership - Created automatically when 2 more persons engage in a business. By default, a business that begins with a verbal agreement or handshake is considered a general partnership. All partners share in both the day-to-day management and business profits. However, I highly advise using a written partnership agreement to form a partnership.

Limited Liability Company - A standard for most small businesses and online businesses. Features limited liability which means the owners of an LLC have no personal liability for the obligations of the LLC. An LLC is the entity of choice for a businesses seeking to flow through losses to its investors because an LLC offers complete liability protection to all its members.

C-Corporation - A corporation is an independent legal entity owned by its shareholders. This means that the corporation itself, not the shareholders that own it, is held legally liable for the actions and debts the business incurs. Also feature Corporate Tax Treatment meaning that corporations file taxes separately from their owners

S-Corporation - Pretty much the same as a C-Corporation + some tax benefits. Also, Profits and losses can pass through to your personal tax return. This means that the business is not taxed itself, only the shareholders are taxed.

When you need the best corporate lawyer call 1-800-564-2707. business lawyer medical devices

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Roy Utah lawyer for real estate broker

 

Roy Utah

Business Transactions - Your Lawyer's Role

 

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Most states require that an entity doing business within their borders designate and maintain a Registered Agent. The Registered Agent can be an individual or company hired to receive Service of Process on behalf of the business. However, not all entities are registered in all states, not all are active and some do business under as many as 40 plus entity names. It is the lawyer's responsibility to find out which entity name they are serving and who the Registered Agent is. If the information is wrong, the lawsuit will be delayed. To find the necessary information, the attorney's staff should be intimately familiar with Secretary of State websites.Each Secretary of State website lists an entity as either "Active" or "Inactive." "Active" means the entity is in good standing and has paid their yearly fee while "Inactive" means they have not, In fact, "Inactive" may indicate that the entity is no longer in business or meet the qualification so the Five-year rule.The most perplexing error may be in determining which entity name is the correct one. For example, an entity may be doing business under both Talbott, Inc. and Talbott, Corp. If a lawsuit is submitted just to "Talbott," it will be returned.The larger Registered Agent companies have offices in nearly every state. They collectively receive thousands of lawsuits a week that generate huge piles of work. Of those, several hundred are returned at the Registered Agent's expense for various reasons. Attorney's who repeatedly make the same errors soon stand out in the Service of Process Specialist's mind and their lawsuits often go to the bottom of the pile. There is no time limit on returns, the Registered Agent makes no money and it may be as much at a week or two before the returns are written up and sent out.The answer is simple. A well informed staff that understands the Registered Agent process can virtually eliminate these and many other costly mistakes.

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Ogden Utah local business attorneys

 

Ogden Utah

Corporate Lawyer

 

lawyer for small business

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What Does A Small Business Lawyer Do

A small business lawyer works with individuals who own small businesses. The lawyer may help them form their business and incorporate their company when they’re just getting starting.

Later, the business owner may turn to the lawyer to help with employment issues and understanding laws and policies that pertain to their business.

The truth is, a small business lawyer can handle anything that the small business owner would need in terms of the law, business formation, hiring and firing employees, lawsuits, and much more.

What Makes A Good Business Lawyer

A good business lawyer is someone who is experienced and knowledgeable in their field. They’ve worked with many businesses and entrepreneurs and have created a smooth process to help business owners get just what they need.

We are a good and reputable business lawyer because we truly care about our clients. We put you first and are here to answer any questions you may have along the way. We’ve worked with countless business owners and entrepreneurs and always deliver on what we promise.

What To Ask A Business Lawyer

When you are meeting your business lawyer the first time, you may have some questions for them. Some of them may include:

Are you licensed to practice law? How many years have you been practicing law? What results do you get for your clients? Do you have any personal recommendations I can check on? What can I expect when working with you? Do you have any hidden fees I should know about? What’s the timeline for this? After your initial consultation, you may have some other questions as you continue to make decisions about your business.

Some of these may be what type of business entity should I choose (LLC or S-Corp), what’s the advantages of each, and how do I make my business compliant with all laws?

Your specific questions will change as you move forward in the process, depending on what you’re getting help for. It’s best to write down any questions you have when you think of them and then ask your lawyer the next time you meet.

When Would I Use A Business Lawyer

You may hire a business lawyer when you’re forming your business and trying to decide how you should incorporate it. You may want a business lawyer to help you file all the necessary documentation and make sure that you’re compliant with all laws once you start your business.

Once your business has launched, you may want a business lawyer to help you create contracts for employees and any other hiring you may need to do. You’ll likely want a business lawyer to help you should you have the need to defend against a lawsuit or present one yourself.

There are so many reasons why you may need to use a business lawyer because a business lawyer has a wide range of skills and knowledge to help you in your day-to-day business operations as well as the unexpected.

If you’re questioning whether your issue needs the help of a business lawyer, call us at our Law Office for a free consultation. We will give you an honest assessment of your situation and help you determine the next steps to take. Simply dial 1-800-564-2707 today to get started.

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Santaquin Utah company lawyer

 

Santaquin Utah

Lawyer for Starting a Business

 

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Contract Attorney

Do you need assistance with your contract?

A contract is a legally binding agreement made between two or more individuals.

The law protects all rights within a contract from the moment all parties sign it. The only exception is if a contract is deemed unlawful or contains serious inaccuracies.

Any party who does not follow promises made in a contract can be held liable.

A contract lawyer is necessary to make sure the contract is lawful and to make sure all parties signing the contract understand the details.

What Does a Contract Lawyer Do?

A contract lawyer serves two main purposes:

The first is drafting contracts and other legally binding documents.

The second is reviewing contracts that have already been drawn up – in some cases, by a different lawyer.

Contract law can be confusing and complicated.

Furthermore, the wording and formatting of legally binding documents tend to be perplexing to anyone who doesn’t fluently speak legal jargon. The purpose of a contract lawyer is to make creating – or signing – a contract a little less bewildering.

Contract Drafting

The first thing a contract lawyer does is draft a contract. This involves tailoring the legal document to fit your specific wants and needs.

It is not uncommon for certain words or phrases in a legal document to be taken the wrong way.

A business contract lawyer will go through the contract and clarify anything that might be questionable to either parties.

Hiring a contract lawyer to ensure you have a well-drafted contract is beneficial for the following reasons:

It will prevent disputes. A well-written contract with everything clearly established is going to make it harder for either party to dispute the contract. Ideally, the contract should satisfy both party’s wants and needs.

It will define the relationship you and other parties have. When everything is said and done, your contract should leave no grey area when it comes to the relationship you have with the other parties.

It will comply with the law. Having your contract drafted by a business lawyer is the easiest way to make sure you are legally covered when both parties sign the contract.

At our Law Firm, we take great pride in drafting and tailoring a contract that is in the best interest of both you and the other parties signing the contract. The contract will be easy to understand and prevent all burdensome legal issues.

A business lawyer can help you from the very beginning of your business, the formation, throughout the years as you grow and succeed. A business lawyer is knowledgeable and experienced and knows how to make sure you are protected and compliant every step of the way.

Contract Review

You already have a contract drafted because you used a contract outline you pulled from the internet and did it yourself – great.

It is still in your best interest to have a lawyer review the contract before you – or the other party – signs it.

Chances are, you did a pretty good job outlining the details of the agreement you and other parties are making to call for the contract in the first place.

You, however, do not look at a contract with the same perspective as a professional contract review lawyer. Law firms such as Mollaei Law are going to look at everything that could possibly go wrong and make sure that is included in the contract. A lawyer will also check for any loopholes the other party could use against you.

Some important items to check before a contract is signed include:

The contract accurately reflects your understandings of the terms of the contract. The benefits and risks of entering the contract - analysis of whether the benefits of entering the contract is worth the risks associated with the contract You are made aware of your responsibilities under the contract and the obligations of each parties are adequately explained and noted. Parties are accurately identified Correct date is stated, and if needed, a correct end date is noted. Hiring a lawyer to review a contract is about protecting yourself.

Obviously, you created the contract because you want legal protection. It is worth taking the actual step to make sure the legal document fully protects you and doesn’t leave anything out.

Should I Have a Lawyer Review My Contract Before Signing?

Ideally, it is always a good idea to have a lawyer read over any legally binding document before you sign it.

The last thing anyone wants to do is find out they unintentionally agreed to something because they didn’t understand the contract. An attorney can guarantee the contract is in your best interest.

Regardless of what type of contract you are getting ready to sign, contact us at 1-800-564-2707 before you sign any legal document or contract.

This way a contract review lawyer can read the contract over and make sure it is your best interest. If necessary, the lawyer can request revisions to the contract before you sign on the dotted line.

Get a contract attorney on your side now - call 1-800-564-2707. lawyer to start a business

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Mapleton Utah business startup lawyer

 

Mapleton Utah

Contract Business Attorney

 

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Do I Need a Business Lawyer?

As a business owner, you face many decisions when it comes to starting, running, and growing your business.

This article is designed to explain your options and help you decide the correct business type for your business. business-types

It explains the advantages and disadvantages of the main business types, including Sole Proprietorship, Partnership, Limited Liability Company, C Corporation, as well as S Corporation.

After I clearly explain each business type in detail and go over the advantages and disadvantages of each, I will explain how you can form your own entity so you can get started with your business and help protect yourself from liability.

Thank you for going on this journey with me. If you have any questions whatsoever, I encourage you to post questions down below in the comment section.

Sole Proprietorship

The sole proprietorship is the simplest business form and is not a legal entity. Sole proprietorship is the easiest type of business to establish which means that there’s no state filing required.

It is simply an enterprise owned and operated by an individual. By default, once you start selling goods or services, you have created a sole proprietorship.

So there’s no actual filing requirements and you simply report your business’s earnings on your personal taxes.

sole proprietorship is not legally separate from its owner and it offers no personal liability protection. The law does not distinguish between the owner’s personal assets and the business’s obligations.

In fact, a sole proprietor’s assets can be and often are used to satisfy the debts and liabilities of the business. In other words, if your business gets sued, your personal assets (such as your house, car, or any other properties you own) may also be in risk.

Accidents happen, and businesses end all the time. Such circumstances may quickly become a nightmare for a business owner who operates as a sole proprietor.

A sole proprietorship can operate under the name of its owner or it can do business under a fictitious name, such as Benjamin's Hair Shop. The fictitious name is simply a trade name--it does not create a legal entity separate from the sole proprietor owner.

The sole proprietorship is a popular business form due to its simplicity, ease of setup, and nominal cost. A sole proprietor need only register his or her name and secure local licenses, and the sole proprietor is ready for business.

The owner of a sole proprietorship typically signs contracts in his or her own name, because the sole proprietorship has no separate identity under the law. The sole proprietor owner will typically have customers write checks in the owner's name, even if the business uses a fictitious name. Sole proprietor owners can, and often do, commingle personal and business property and funds, something that partnerships, LLCs and corporations cannot do.

Sole proprietorships often have their bank accounts in the name of the owner. Sole proprietors need not observe formalities such as voting and meetings associated with the more complex business forms.

Sole proprietorships can bring lawsuits (and can be sued) using the name of the sole proprietor owner. Many businesses begin as sole proprietorships and graduate to more complex business forms as the business develops.

Because a sole proprietorship is indistinguishable from its owner, sole proprietorship taxation is actually easy. The income earned by a sole proprietorship is income earned by its owner.

A sole proprietor reports the sole proprietorship income and losses and expenses by filling out and filing a Schedule C, along with the standard Form 1040. Your profits and losses are first recorded on a tax form called Schedule C, which is filed along with your 1040. Then the "bottom-line amount" from Schedule C is transferred to your personal tax return.

This aspect is attractive because business losses you suffer may offset income earned from other sources.

As a sole proprietor, you must also file an IRS tax Schedule SE with Form 1040. You use Schedule SE to calculate how much self-employment tax you owe. You need not pay unemployment tax on yourself, although you must pay unemployment tax on any employees of the business. Of course, you won't enjoy unemployment benefits should the business suffer.

Advantages of Sole Proprietorship

Instant, easy & inexpensive No state paperwork is required for creation No separate tax filing is required -- profits or losses are reported on the owner’s tax return The owner may freely mix business and personal assets A sole proprietor need not pay unemployment tax on himself or herself (but must pay employee unemployment tax) Few, if any, ongoing formalities

Disadvantages of Sole Proprietorship The owner is subject to unlimited personal liability for business debts, losses and liabilities Obtaining capital, such as a bank loan, can be more difficult -- lenders often require a more formal entity structure Sole proprietorships rarely survive an owner’s death or incapacity, so they do not retain value Sole proprietorships by definition can only have one owner A distinct disadvantage, however, is that the owner of a sole proprietorship remains personally liable for all the business's debts.

So, if a sole proprietor business runs into financial trouble, creditors can bring lawsuits against the business owner. If such suits are successful, the owner will have to pay the business debts with his or her own money.

Let's examine this more closely because the potential liability can be alarming. Assume that a sole proprietor borrows money to operate but the business loses its major customer, goes out of business, and is unable to repay the loan. The sole proprietor is liable for the amount of the loan, which can potentially consume all her personal assets.

Imagine an even worse scenario: The sole proprietor is involved in a business-related accident in which someone is injured or killed. The resulting negligence case can be brought against the sole proprietor owner and against her personal assets, such as her bank account, her retirement accounts, and even her home.

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