Various business organizations in the paralegal certificate business law class
The advantages and disadvantages of the sole proprietorship as part of the paralegal certificate
Starting a business or helping someone else start a business can be overwhelming, but that is where a paralegal certificate can help. The Business law class in the paralegal certificate program will teach you the different types of business organizations such as the corporation, general or limited partnership, limited liability company, and sole proprietorship. There are many disadvantages and advantages to each business form so it is important to choose the right one based on the client’s needs and goals.
A sole proprietorship is the most common small business structure. It is a business owned and operated by a single individual. There are many advantages of a sole proprietorship: it is easy to form since there are no state forms to complete, it gives the owner complete control over the business since there are no partners to answer to, it allows the owner to avoid any joint and several liability for the actions of partners since there are no partners and the owner acts alone, and there is also a tax savings since the business’s profits and losses are treated as the personal profits and losses of the owner which means that the profits of the business are only taxed once and any losses and expenses are deductible.
However, there are disadvantages of a sole proprietorship. Since the owner is alone, he/she is completely responsible for the business and it is hard work and requires long hours to run a business, it also doesn’t have perpetual existence so it terminates upon the death or incapacity of the owner which makes it difficult to pass down to younger generations, finally and most importantly the sole proprietorship creates unlimited personal liability. This means that all of the owner’s personal assets related to the business or not, may be attached to settle the owner’s business debt or any type of personal liability.
There are advantages and disadvantages in forming a sole proprietorship. Choosing which business entity to form can be one of the most important decisions that your client ever makes and a paralegal certificate can play a key role in deciding which form is best.
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