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Is sole proprietorship right for you?

For those who own a business or want to start a business in St. George, Utah.gov is an excellent website for entrepreneurs. It has informative sections on how to select a business idea, how to prepare a business plan, government requirements, relocating a firm, dissolving a business and running a business.

The website also has a section to help people begin the process of business entity formation. Included in the section is a note that each selection is accompanied by “very specific laws pertaining to the regulations with which you as a business owner are required to comply.” Unsurprisingly, the state acknowledges that their website, as fine as it is, might not be enough for people to make a fully informed decision on business structure.

They might be well-served by sitting down with a business attorney or professional accountant to go over both the regulations and the benefits of the various options, including sole proprietorships, partnerships, limited partnerships, corporations and limited liability companies.

The simplest, most common business form is the sole proprietorship. It’s for someone who owns all (or most) of the property and assets and is completely responsible for the control and management of a business. They’re also responsible for the liabilities of the business.

The business is an extension of the single owner who owns it. No one else owns it and no one else is in charge. For some, it's an ideal situation. The sole proprietor is in control of the profits but is at the same time personally liable for the business debts and obligations.

However, many people will pause at the idea of being personally liable for business obligations and debt, understanding that the burdens should not be assumed lightly. In fact, they are an excellent starting place for a discussion with an experienced business attorney.

Source: Utah.gov, "Forming a Sole Proprietorship," retrieved July 2014

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