Sole Proprietorship

A sole proprietorship is the most basic form a business may take.  A single person owns the business.  All profit and losses belong to the business owner.  There is no limitation on liability available for the owner of a sole proprietorship.  This means that any losses that occur, may be recouped from the personal assets of the owner.  For this reason, many consider the sole proprietorship a risky business structure.  On the other hand, it is cheaper in many respects than other types of business structures.  There is no annual filing required by the Secretary of State.  A sole proprietor will account for the business income on Schedule C attached to the owner’s personal return.  A personal return is usually easier to prepare than other returns, and so accounting costs are generally cheaper.  There is no “double taxation” of income as in C Corporations.  A sole proprietorship trades protection liability protection for a cheaper tax burden.  There are other concerns that might weigh in favor or against choosing this type of business structure.  Please contact us today to discuss whether you should operate your business as a sole proprietorship.


This information is provided to you so that you might understand the basics of the most common business structures available in Tennessee.  The choice of a business structure is affected by many variables.  The information provided on this webpage is not intended to operate as an exclusive source of information.  Please contact us for assistance in determining what structure might work best in your particular case.

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