Category: Reviews

Wyoming Discount Registered Agent Reviews a Sole Proprietorship

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A sole proprietorship is considered a business that is the same as the owner.  An entity has not been created, so all assets and liabilities belong to the owner which could be a problem if the business fails.

Basic Characteristics

  • Proprietorships make up the majority of businesses in the United States
  • As a business, it is considered a common law
  • If the owner dies, the business will either cease to exist or can be passed down to heirs.
  • Since the business is the same as the owner, the personal liability is unlimited. The owner is on the hook both fiscally and legally.
  • There are no stockholders, partners or board of directors
  • The owner may find that financing the business is limited and has to reinvest profits.

Here are Some Advantages

  • It is easier to start up and get the business running as there are no entity filing requirements.
  • The business owner can make all of the decisions, so it can be simple to operate.
  • They can register a trade name.
  • The owner is responsible for all taxes personally – the business does not file a tax return.

Here are Some Disadvantages

  • In the event of a law suit, the owner’s personal assets are on the line.
  • It does not live on if the owner dies – it passes on to the heirs who can continue with the business, restructure the business or close the business altogether.
  • Many times, owners finance the business by dipping into their savings or borrowing money.

Here are the Tax Implications

  • All of the profits of the business are claimed on the business owners’ personal income tax. They use the Internal Revenue Service’s Form 1040, or Schedule C-EZ in addition to the Schedule F and once in a while the Schedule E.
  • The business owner is liable for Self-Employment Tax – Suggested read would be the IRS Publication 533.
  • The business owner is liable for the quarterly tax payments.
  • The owner will need to file for a Federal Tax Identification Number on form SS4 if there are going to be employees.

Wyoming Discount Registered Agent PhotoThe information provided on this article is not legal advice.  A business owner needs to confer with their Certified Public Accountant or qualified attorney.  There are many different types of business entities to choose from.  When opening a business, it would be prudent to explore all of the choices to be sure a business owner is covering all bases.

Wyoming Discount Registered Agent, Inc. has been working with businesses all across the United States.  They are licensed with the state of Wyoming to help businesses incorporate in Wyoming.  There are many advantages to incorporating in the state of Wyoming.  One of the advantages to incorporating in the state of Wyoming is if there is a law suit and you are doing business in another state; the suit will have to be tried in Wyoming.  This can be costly, so most lawyers will not pursue a case in Wyoming.  Another benefit is they do not keep physical records of the corporation so they do not share information with the Internal Revenue Service.