Are you thinking about starting a business? Will you be hiring any employees? If you will be the only person working with the business, operating as a sole proprietorship is your best option. There are a handful of advantages of running a business using this legal model, and we will discuss them in today’s post.
An important advantage of a sole proprietorship is that you face fewer business fees. It can hundreds of dollars to register as an LLC or any other type of business. There are zero fees associated with operating as a sole proprietorship, just having to pay your income taxes every year at the state and federal levels.
When it comes to your taxes, you don’t have to file for an employer identification number when operating as a sole proprietorship. Instead, you report your income on the Schedule C Form at the federal level using your Social Security number.
There is no paperwork associated with a sole proprietorship. You do not need to register with your township or state like an LLC is required to do. This means that once you come up with your business idea, you can start doing business. You don’t have to wait for your license to arrive.
Another advantage of a sole proprietorship is that you can accept and make payments using your personal checking account. An LLC requires the use of a business checking account in order to operate.
As you can see, a sole proprietorship is a great option for businesses with just one person on the payroll. From tax benefits to preventing partner disputes; a sole proprietorship can save you time, money and reduce your stress.