Companies law
Basic forms:
Sole proprietorship
Partnership (General · Limited · LLP)
Corporation (LLC)
Cooperative
United States:
Business trust LLLP · Series LLC Delaware corporation Nevada corporation
United Kingdom / Commonwealth / Ireland:
Limited company (By shares · By guarantee) (Public · Proprietary) Community interest company
Civil law countries:
AB · AG · ANS · A/S · AS
K.K. · N.V. · OY · S.A. · GmbH
SE
Doctrines
Corporate governance
Limited liability · Ultra vires
Business judgment rule
Internal affairs doctrine
De facto corporation and corporation by estoppel
Piercing the corporate veil
Rochdale Principles
Related areas of law
Contract · Civil procedure

A sole proprietorship, or simply proprietorship, is a type of business entity which legally has no separate existence from its owner. Hence, the limitations of liability enjoyed by a corporation and limited liability partnerships do not apply to sole proprietors. All debts of the business are debts of the owner. It is a "sole" proprietor in the sense that the owner has no partners. A sole proprietorship essentially means a person does business in their own name and there is only one owner. A sole proprietorship is not a corporation; it does not pay corporate taxes, but rather the person who organized the business pays personal income taxes on the profits made, making accounting much simpler. A sole proprietorship need not worry about double taxation like a corporate entity would have to. Image File history File links Scale_of_justice. ... Companies law is the field of law concerning business and other organizations. ... A partnership is a type of business entity in which partners share with each other the profits or losses of the business undertaking in which all have invested. ... This article needs to be wikified. ... A limited partnership is a form of partnership similar to a general partnership, except that in addition to one or more general partners (GPs), there are one or more limited partners (LPs). ... A limited liability partnership (LLP) has elements of partnerships and corporations. ... For other uses, see Corporation (disambiguation). ... This article is about a U.S.-specific corporate form; for a general discussion of entities with limited liability, see corporation. ... For other uses, see Coop. ... A Massachusetts business trust or MBT is a legal trust set up for the purposes of business in the state of Massachusetts. ... The limited liability limited partnership (LLLP) is a relatively new modification of the limited partnership, a form of business entity recognized under US commercial law. ... A Series LLC is a special form of a Limited liability company that provides extra protection for personal assets comprised of multiple business entities. ... A Delaware corporation is a corporation chartered in the U.S. state of Delaware. ... It has been suggested that this article or section be merged into Nevada. ... It has been suggested that this article or section be merged into Limited liability company. ... A limited company by shares (limited or Ltd. ... In British or Irish company law, a Limited Company is a person on its own right. ... The initials PLC after a UK or Irish company name indicate that it is a public limited company, a type of limited company whose shares may be offered for sale to the public. ... A Proprietary limited company or abbreviated as under Australian law is a business structure that has at least one shareholder with a limited number of shares. ... A community interest company (CIC) is a new type of company introduced by the United Kingdom government in 2005. ... For other uses of civil law, see civil law. ... Aktiebolag is the Swedish term for a corporation, i. ... Aktiengesellschaft (IPA: ; abbreviated AG) is a German term that refers to a corporation that is limited by shares, i. ... An ansvarlig selskap is a Norwegian personal responsibility company model, mainly used in small-to-medium businesses, which translates directly into Responsible Company. This reflects that the participants - or owners - are personally responsible for any outstanding debts the company would aquire. ... An Aktieselskab (abbreviated A/S) is the Danish name for a stock-based corporation. ... An aksjeselskap is the Norwegian term for a stock-based corporation. ... Business corporation ) is a type of corporation ) defined under Japanese law. ... The term Naamloze Vennootschap (usually abbreviated NV) is the Dutch terminology for a public limited liability company. ... Osakeyhtiö, directly translated as share corporation, is the Finnish equivalent of Limited company (Ltd or LLC) or Gesellschaft mit beschränkter Haftung (GmbH). ... S.A. is the abbreviation of Société Anonyme in French, Spółka Akcyjna in Polish, Sociedad Anónima in Spanish, Sociedade Anónima in Portuguese, or Naamloze Venootschap (N.V.) in Dutch, generally designating corporations in various countries. ... Gesellschaft mit beschränkter Haftung (GmbH or GesmbH) is a type of legal entity created in Germany in 1892. ... The Council Regulation on the Statute for a European Company of the European Union (adopted October 8, 2001; OJ L 294, 10 November 2001, pp. ... Corporate governance is the set of processes, customs, policies, laws and institutions affecting the way in which a corporation is directed, administered or controlled. ... Limited liability (LL) is liability that is limited to a partner or investors investment. ... Ultra vires is a Latin phrase that literally means beyond the power. ... The business judgment rule is a case law-derived concept in Corporations law whereby a court will refuse to review the actions of a corporations board of directors in managing the corporation unless there is some allegation of conduct that (1) violates (a) the directors duty of care, (b... The internal affairs doctrine is a choice of law rule in corporations law. ... De facto corporation and corporation by estoppel are both terms that are used by courts to describe circumstances in which is a business organization that has failed to become a de jure corporation (a corporation by law) will nonetheless be treated as a corporation, thereby shielding shareholders from liability. ... The corporate law concept piercing (Lifting) the corporate veil describes a legal decision where an officer, director, or shareholder of a corporation is held liable for the debts of the corporation despite the general principle that those persons are immune from suits in contract or tort that otherwise would only... The Rochdale Principles are a set of ideals for the operation of cooperatives. ... A contract is a legally binding exchange of promises or agreement between parties that the law will enforce. ... Civil procedure is the body of law that sets out the process that courts will follow when hearing cases of a civil nature (a civil action, as opposed to a criminal action). ... The term business entity refers generally to any organization engaged in business activities, regardless of legal structure. ... A juristic person is a legal fiction through which the law allows a group of natural persons to act as if it were a single composite individual for certain purposes. ... Limited liability (LL) is liability that is limited to a partner or investors investment. ... For other uses, see Corporation (disambiguation). ... A limited liability partnership (LLP) has elements of partnerships and corporations. ... For other uses, see Debt (disambiguation). ... A partnership is a type of business entity in which partners share with each other the profits or losses of the business undertaking in which all have invested. ... In jurisprudence, a natural person is a human being perceptible through the senses and subject to physical laws, as opposed to an artificial or juristic person, i. ... Corporate tax refers to a direct tax levied by various jurisdictions on the profits made by companies or associations. ... Tax rates around the world Tax revenue as % of GDP Economic policy Monetary policy Central bank   Money supply Fiscal policy Spending   Deficit   Debt Trade policy Tariff   Trade agreement Finance Financial market Financial market participants Corporate   Personal Public   Banking   Regulation        An income tax is a tax levied on the financial income... This article or section does not cite any references or sources. ... It has been suggested that Accounting scholarship be merged into this article or section. ... Double taxation is a situation in which two or more taxes may need to be paid for the same asset, financial transaction and/or income and arises due to overlap between different countries tax laws and jurisdictions. ... The term company may refer to a separate legal entity, as in English law, or may simply refer to a business, as is the common use in the United States. ...

Most sole proprietors will register a trade name or "Doing Business As". This allows the proprietor to do business with a name other than his or her legal name and also allows the proprietor to open a business account with banking institutions. A trade name, also known as a trading name or a business name, is the legal name of a business, or the name which a business trades under for commercial purposes. ... The phrase doing business as (abbreviated DBA or d/b/a) is a legal term, meaning that the name of the business or operation does not include the legal name of its proprietor, the names of all partners, or the official registered name of the limited partnership or corporation that...

Advantages

An entrepreneur may opt for the sole proprietorship legal structure because no additional work must be done to start the business. In most cases, there are no legal formalities to forming or dissolving a business. A sole proprietor is not separate from the individual; what the business makes, so does the individual. At the same time, all of the individual's non-protected assets (e.g homestead or qualified retirement accounts) are at risk. There is not necessarily better control or business administration possible with a sole proprietorship, only increased risks. For example, a single member, member managed LLC still only has one owner, who can make decisions quickly without having to consult others, but has the advantage of limited liability. An entrepreneur (a loanword from French introduced and first defined by the Irish economist Richard Cantillon) is a person who operates a new enterprise or venture and assumes some accountability for the inherent risks. ...

Furthermore, in many jurisdictions, a sole proprietorship files simpler tax returns to report its business activity. In the United States, for example, a sole proprietorship reports its income and deductions on a Schedule C on the individual's personal return. To the IRS, a single member LLC is treated as a disregarded entity, and thereby, the owner of a single member LLC will still report income and deductions on a Schedule C on their individual . In comparison, an identical small business operating as an S Corporation or partnership would be required to prepare and submit a separate tax return. As with all flow through entities, all of the profits and losses from the business go right to the owner. A sole proprietorship often has the advantage of the least government regulations.

Disadvantages

A business organized as a trader will likely have a hard time raising capital since shares of the business cannot be sold, and there is a smaller sense of legitimacy relative to a business organized as a corporation or limited liability company. It can also sometimes be more difficult to raise bank finance, as sole proprietorships cannot grant a floating charge which in many jurisdictions is a sine qua non of bank financing. Hiring employees may also be difficult. This form of business will have unlimited liability, therefore, if the business is sued, the proprietor is personally liable. The life span of the business is also uncertain. As soon as the owner decides not to have the business anymore, or the owner dies, the business ceases to exist. For other uses, see Stock (disambiguation). ... This article is about a U.S.-specific corporate form; for a general discussion of entities with limited liability, see corporation. ... A floating charge is a security interest over all of the assets of a company which floats until an event of default is triggered or until the company goes into insolvent liquidation at which time the floating charge crystallises and attaches to all of the assets of the company. ... Sine qua non or condicio sine qua non was originally a Latin legal term for without which it could not be (but for). It refers to an indispensable and essential action, condition, or ingredient. ... Employment is a contract between two parties, one being the employer and the other being the employee. ... Civil action redirects here. ...

In countries without a National Health Service, such as United States, a sole proprietor is also responsible for his or her own health insurance, and may find difficulty finding any if one of the family members to be covered has a previous health issue. Another disadvantage of a sole proprietorship is that as a business becomes successful, the risks accompanying the business tend to grow. To minimize those risks, a sole proprietor has the option of forming a limited liability company, or LLC. Note that such an LLC would still be treated as a sole proprietorship for income tax accounting purposes. NHS redirects here. ... This article is about a U.S.-specific corporate form; for a general discussion of entities with limited liability, see corporation. ...

References

• Hamilton, Robert W., and Jonathan R. Macey, Cases on Corporations Including Partnerships and Limited Liability Companies, 9th Ed., West Group, 2005.