Among the different business entities to choose from, one popular option for entrepreneurs and new businesses is the sole proprietorship. If you’ve decided that a sole proprietorship is a good fit for your business, our credible Houston sole proprietorship attorney at GK Law PLLC will take the time to sit down with you and discuss in detail your business needs and goals.
Our legal team is ready to help you form, grow, and protect your venture. Schedule an initial consultation with our trusted Texas business law attorneys today and get started with your business formation.
If you have a dream of starting your own business, choosing a corporate structure is one of the most important decisions you’ll make. One of the simplest options is to create a sole proprietorship. To make sure you start yours with success in mind and have a plan for future growth in place, consult our trusted Houston sole proprietorship lawyer as soon as possible.
At GK Law PLLC, we represent clients across the complete spectrum of business entity formation disputes and issues. We represent small and large businesses in Houston, TX, in whatever legal form those businesses choose. Our legal team can help you:
To learn more about sole proprietorship and whether this is the appropriate business form for you, contact our law office now and schedule an initial consultation. We will use our skills, knowledge, and experience to ensure your business formation goes smoothly.
A sole proprietorship is a business entity owned and operated by a single individual. It is a popular legal entity choice for many new business owners in Texas. Sole proprietorships are recommended for simple and small businesses. Due to their simplicity, sole proprietorships are ideal for low-risk businesses making comparatively lower profits. Individuals who are in business for themselves, such as artists, writers, photographers, or designers, are usually sole proprietors.
As a sole proprietor, the individual who owns a small business receives all profits and has the exclusive right to make business decisions. However, the individual owner is financially responsible for all the debts and liabilities of the business. There is no legal distinction between the business and the individual. If you are planning to set up a sole proprietorship, our qualified Houston sole proprietorship attorney can help you start your business off on the right foot.
As with any business decision, there are certain factors to consider before setting your small business up as a sole proprietorship. Many advantages flow from a sole proprietorship. A knowledgeable sole proprietorship attorney in Houston TX can help you determine the benefits of setting up this type of business structure.
As a sole proprietor, you go solo in the financing, marketing, managing, and determining policies and direction of your business. You have complete control of the business and can transfer assets, stop operations, or sell the business whenever you like. You won't have to consult with or receive prior approval from other owners on your business decisions.
In the United States, a sole proprietorship is the most popular business entity because it is the easiest to form. Since it is the simplest business arrangement, you can start one up with little paperwork to file with the Texas Secretary of State and a few legal formalities. Unlike in a partnership, corporation, or limited liability company, a sole proprietorship has much less government regulations.
The paperwork to start trading as a sole proprietor is limited, meaning there are minimal costs involved. In most cases, you will only need to register your business name and apply for relevant permits or licenses. The setup costs will reflect the fees associated with registration and licensing.
Sole proprietorships are considered pass-through entities. There is no legal distinction between the owner of the sole proprietorship and the business. As a sole proprietor, you'll have to take responsibility for withholding and paying all income taxes. You’ll report the income from the business on your personal tax return, which is then taxed at the personal rate.
Understanding the disadvantages of a sole proprietorship will help you carefully strategize and plan your business. Most of the disadvantages of a sole proprietorship arise because the law does not see it as a separate legal entity from the sole proprietor. A competent Houston TX sole proprietorship lawyer can help you weigh these factors in light of your circumstances.
The biggest disadvantage of a sole proprietorship is that there is no separation between business assets and personal assets. As the owner and business are treated as one, a sole proprietor is personally liable for the liabilities, obligations, and debts of the business including loans and lawsuits. This means a sole proprietor’s personal assets can be at risk if the business cannot pay its liabilities.
Since the owner and the business are one, a sole proprietorship ceases to exist upon the death of the owner. When the owner passes away, the business ends as well unless the owner created an estate plan which allowed the business to continue.
In a sole proprietorship, it is difficult to attract outside investment. Due to the unlimited liability of the owner, there's no protection against creditors. Therefore, investors and banks often view sole proprietorships at a greater risk of business failure compared to other structures. Apart from that, finding investors is also difficult because most investors want to share in the profits of the businesses they invest in.
Sole proprietorships are a great starting point for many businesses. Although sole proprietorships are by far the easiest type of business structure to set up, they also present many vulnerabilities to the owner, including liability for debts. Before making any major business decision, it is critical that you understand the laws surrounding particular business structures, file taxes in compliance with state and local regulations, and know what rights you have as a business owner.
If considering starting a business as a sole proprietor, it is crucial to seek legal advice from our experienced Houston sole proprietorship attorneys at GK Law PLLC to help you decide whether this type of structure suits your business situation. Our business law firm can walk you through the entire process of business formation, ensuring compliance each step of the way.
We will discuss the tax laws and requirements for sole proprietorships in Texas. We can help you save time and money in dealing with complex legal matters related to your business. Contact us now and schedule an initial consultation with our skilled Houston business lawyer.