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Table of content
ASSESSMENT COVER SHEET / FEEDBACK FORM 1
Question 1 2
Question 2 4
Question 3 5
Question 5 7
Reference 8
Question 1
The sole proprietorship is the easiest way to run a company. Ownership alone is not a legitimate entity. It directs attention to an individual who bought the company and is directly responsible for his or her debts. Under the name of its owner, a sole ownership may operate or company under a fictitious name, like Nancy's Nail Salon. The fictional name is just a trading name – it does not establish a distinct legal entity from the majority beneficiary.
Sole Proprietorship Advantages:
A single owner has full ownership and decision-making authority over the business.
Sale or sale can take place at the sole proprietor's discretion.
No tax contributions by corporations.
Minimal legal expenses to establish a single company.
Sole Proprietorship Disadvantages:
The sole owner of the corporation will be kept individually responsible for the company's debts and commitments. In addition, this risk covers any obligations arising from actions taken by the company's workers.
Both liabilities and business decisions are the sole proprietor's shoulders.
Investors are normally not going to invest in single ownerships.
A Limited Liability Corporation (LLC) is a US business arrangement that mixes collaboration and corporate elements with private businesses. Limited liability companies profit from versatility and flow-through corporate taxes while retaining the corporate limited liability form. The owner or potential business owner should be familiar with the benefits and drawbacks of the LLC prior to establishing a limited liability partnership and how they equate with those of other businesses.
In comparison with ownerships and alliances alone. Compared with a single ownership or partnership, the LLC has the most benefits. But not all companies are at a time when an LLC is business-sensitive.
Compared with companies. LLCs are analogous to companies since they give their members limited liability insurance. LLCs are also less formal and have more fiscal versatility. One of the drawbacks, though, is that benefit will be taxed on self-employment.
In comparison with limited collaborations. LLCs provide all members of the company with freedom of liability, unlike restricted partnerships, which provides only limited shareholders with protection of liability.
What Is the Difference Between a Sole Proprietorship & an LLC?
Differences in Liability Protection:
Maybe the greatest distinction between a single owner and an LLC is the question of limited liability immunity. Unlimited responsibility for corporate loans, litigation and other business-related liabilities lies with single proprietors. This ensures the single owners are directly responsible for any liabilities accrued during company operations. If sole ownership assets are not sufficient to cover the obligations of a corporation, creditors may rely on the personal assets of a sole proprietor to fulfill the duty.
Differences in Owner Control:
Sole owners retain absolute ownership of the company, and how the company spends its profits. No other companies or entities exchange business ideas with a single company. Alone, the sole owner would have to decide how to run the business and exploit the capital of the company.
LLCs of more than one owner have other owners and administrators who may provide information on the management of the company. In comparison, LLC owners may opt to employ people outside the business, as opposed to managing everyday affairs of the company.
Just one person may serve as the owner of the corporation to be treated as a sole proprietorship. Another business, trust or property may not be part of a sole proprietorship. Instead, an LLC can have an infinite number of shareholders, including international companies, enterprises, other LLCs, and partnerships.
An LLC can still exist, irrespective of who the organization manager or representatives are. When a company owner dies, retires or wishes to sell the company, a single ownership will cease to exist. In the case of a member's death, resignation or retirement, LLCs may have an operations arrangement which provides for the continuation of the business.
