Sole Proprietorships Lawyer in California
This is the simplest business form and anyone who starts a business without other co-owners is a sole proprietor by default. Nothing needs to be filed to create a sole proprietorship although some sole proprietors file for a fictitious business name with the county where they do business. Due to the lack of formalities and automatic setup, sole proprietorships are so easy to maintain. A sole proprietor may be the owner of a local grocery store, a freelance writer, or an attorney who works for others on a contractual basis.
However, even though it is the simplest of business structure, the sole proprietor is not excused from various local, state and federal laws specific to a particular business or businesses in general. Therefore, even though sole proprietors do not have to follow a lot of the formalities associated with more complex business entities, they cannot fall asleep at the wheel and must conscientiously follow all registration, licensing, safety, permit and tax laws to keep their business in good standing.
The low cost and simplicity of operating a sole proprietorship comes at a cost. The primary disadvantage of a sole proprietorship is that the owner personally liable for the liabilities of the business. This means that if the creditors of the business can go after the sole proprietor’s house, bank accounts, retirement savings, and other assets. Purchasing business insurance will help reduce personal liability for negligence but not business debts. There is also no business continuity because when the sole proprietor dies the business ceases to exist. Ownership in a sole proprietorship is also hard to transfer because the business assets and documents tend to be in the name of the individual rather than the business, and the goodwill and knowhow of the business is often tied to the selling individual and may be hard to carry over to the new owner.
Sole proprietorships tend to exist by default because its business owners have not explored or are not ready to move to a more beneficial but complex entity form.
Sole Proprietorship Lawyer San Francisco
Our San Francisco sole proprietorship lawyers serve the entire Caifornia Bay Area. The Zurada Law Group is just a phone call away. We are experienced sole proprietorship lawyers in California.
For a FREE consultation call 415-637-8483 or just fill out our contact form on the right hand side of your screen.