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Sole Proprietorship Questions

Sole proprietorships are the oldest types of business. Sole proprietorship occurs with one person who owns and operates the business with the anticipation of making a profit. There are many examples of a sole proprietorship; a crafter who sells his craft at fairs, freelance workers, virtual assistants etc. If you would like to learn more about sole proprietorships, take a look at the questions below that have been answered by Experts.

What are the benefits of a sole proprietorship and an LLC? Which would be more appropriate for a person just starting their own equine business, who only has one employee?

The benefits of an LLC (limited liability company) are continuous tax benefits for those who have more than one member. You have personal coverage from all liabilities that occur from the LLC. Having an LLC allows you to deduct 100 % your health insurance premiums that have been paid. You pay your self -employment taxes based on your net income.

The benefits of a sole proprietorship are: you have a simple tax form for filing your self employment taxes. You have no registration fees or restrictions; you won't have to deal with payroll. However, since your business will be dealing with horses, there is a chance for some liability issues so you may consider forming an LLC. You will still need some form of liability insurance. The LLC will protect the horse owner in the event of a catastrophic loss. When you start your LLC, you will need to get with an accountant to assist you with payroll for the employee. You will also need to consult with an insurance agent about liability insurance.

If an individual has a Sole-Proprietorship construction business and some work needs repaired does a warranty legally transfer if the construction contact was with a previous owner?

There really isn't any way to know this without reading the warranty agreement that you had with the customer. Usually, most warranties will say that it is not transferrable. This can sometimes be argued that the warranty was between the 2 parties only. Being a sole proprietorship, you lacked corporate protection which means you would still be liable for any obligations that occurred during the business. You can claim that the warranty wasn't transferrable, but the new owner could sue you and claim the warranty still applies. If the warranty is transferrable, you will have to pay for the needed repairs.

What should an individual do if they are being threaten by their spouse for fraud charges when the spouse agreed to giving the individual money from a sole proprietorship they ran together?

It appears that the spouse is claiming that you committed extortion which is a serious claim and a felony charge. The first thing you should do is consult with your divorce attorney about the threats from the spouse. You will also need an attorney to represent you if the spouse follows through with their threat. It may only take a stern letter from your attorney to put a stop to the threats.

An Indiana resident owns a sole proprietorship. Does their spouse automatically own half?

By law, the spouse would have a marital property interest in the sole proprietorship if it was established during the marriage. While the spouse will have an interest in the business, the IRS views you as a sole owner and will continue to tax you as a sole proprietorship.

Many people choose a sole proprietorship when starting a business. The benefits of a sole proprietorship are enough to encourage most people to list their business as one. Many people are not aware of the legalities involved with operating a sole proprietorship and questions begin to arise about the ins and outs of business. If you have questions about a sole proprietorship, you should ask an Expert
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