In a sole proprietorship, a single person owns the business, and there is no separation between the business and the individual. The individual is the company. If the person dies, the company does not survive on its own. A SP is taxed at his or her tax rate, and pays self-employment tax. All revenues and expenses are reported on the owner's Schedule C of their 1040. The owner of the sole proprietorship has the sole discretionary power to make all decisions, and there are generally no investors. The SP raises funding by using his or her private savings, or by obtaining ...
The solution discusses the primary differences between sole proprietorship, partnership, and corporation forms of business ownership.