Thy See Fit Sole Proprietorship Benefits And Risk
Imagine that a friend tells you about their idea to start a sports therapy clinic which they plan to operate as a sole proprietorship.
Respond to the following in a minimum of 175 words:
- What benefits and risks would you advise your friend to be aware of?
Shawna Cutuli
. Respond to the following in a minimum of 100 words:
When deciding how to open a new business it’s very important to weigh all of your options. Starting out as a sole proprietorship has less start up costs, you don’t need government approval and obtaining a DBA or business license is easier than going through a government process. The sole business owner can have the freedom to run the business the way they want. They are essentially their own boss and have the flexibility to conduct business according to how thy see fit. Taxes are also done similar to your personal taxes which is pretty straight forward and the owner will own all of the assets and liabilities. The risks to being a sole proprietor is they are held personally liable for any default on the business. This means they can go after your personal belonging such as a house or automobile. This includes personal contract as well. “The proprietor’s only access to capital is what he or she can develop on his or her own through personal funds or loans from other (Lee 2019)”. This means they can’t fund raise or sell stocks or bonds to build equity.
Reference:
Lee, K. (2019). Business law (2nd ed.). Retrieved from https://www.myeducator.com/reader/web/760ai/
Kee’von Cooper
. Respond to the following in a minimum of 100 words:
Hello Class,
Running a gym as a sole proprietorship may be a good idea in the short run. The friend can rent out a office or something and do personal therapy to a small group of individuals to earn money to invest in equipment and a larger space. Depending on how large the membership becomes though will reveal whether it is feasible to continue as a sole proprietorship. As more people attend and more money pours in, the owner will need to have people in high places as far as finances and operations. If the owner wants the company to be large and have several locations in different states, it would be better for the owner to switch to a corporation both for capital purposes and liability purposes. If the business is a sole proprietorship, the owner would have to deal with all the backlash of a lawsuit and that can suck up capital quickly. On the other hand, if the business is ran as a corporation, the corporation would be the one getting sued and the owner would be free to start another business with a clean background if the corporation went under.