A sole proprietorship is a simple and inexpensive way to organize your business legally. As the business lawyers of Zangari Cohn Cuthbertson Duhl & Grello, P.C. know, sole proprietorships have some distinct benefits and drawbacks. These legal professionals, located in New Haven, CT, have been serving all of New England since 1946. Below, the expert attorneys explain sole proprietorships in further detail.

One Legal Entity

In a sole proprietorship, there is no legal distinction between the business and the business owner. There cannot be multiple owners or co-owners, unless one of those co-owners is also your spouse. Even though the owner and the business are considered one legal entity, you can still register a name for your sole proprietorship if you do not wish to use your own name. In most areas, you must register your name with the state.

Advantages

Sole proprietorships are easy and straightforward to establish. They are also far cheaper than more complex types of business organizations, such as corporations or limited liability companies. When you pay your business-related taxes, you do so as part of your individual tax returns. Sole proprietorships are ideal for one-person business operations, such as freelancers, consultants, and home-based businesses.

Disadvantages

With a sole proprietorship, liability is entirely on the owner. This means if you default on loans or get sued by clients, vendors, or lenders, the responsibility for those issues are yours and yours alone, and lawyers can legally come after your personal assets. Also, a sole proprietorship leaves little room for further development of your business, though you are entitled to rework your one-person operation into another type of organization if circumstances warrant an expansion of ownership.

To contact Zangari Cohn Cuthbertson Duhl & Grello, P.C. and schedule a consultation with an attorney for a business or civil litigation matter, visit their website. You can also reach them at (203) 789-0001, or through their Facebook or Yelp pages. Trust this team of local attorneys to guide you with the practical advice you need to make your business thrive.