Livestock Entrepreneurship

SOLE PROPRIETORSHIP

• Sole proprietorship is the easiest, oldest, and most popular form of business to create. Sole proprietorship usually involves one person owning and operating a business; the owner and business is the same person. The owner is the only one responsible for the activities of the business. This form of business is usually a service business that is handled and operated by one person. Eg. Veterinary Consultants, Auditors.
• The factors associated with the sole proprietorship, along with their advantages and disadvantages, are as follows:
  • Profits are taxed as income to the owner personally.
  • Tax rate is lower than the corporate tax rate.
  • Owner has complete control of the business.
  • There is unlimited liability for company debts.
  • Little reporting is required, and government regulation is minimal.

Sole Proprietorship
Advantages	Disadvantages
easy and inexpensive to create one owner has complete authority over the business taxes are not separate from the owner’s; usually at a lower rate no certificate of incorporation no bylaws, minutes, stock shares all profits go to owner higher flexibility	full liability for debts, etc. higher risk of losing personal assets, such as car, home, etc. personal responsibility for workers’ injuries no one to take over if owner becomes sick difficult to obtain finances for business requires more money invested by owner temptation to mix business money with personal money only as successful as the skills, abilities, and talents of the owner business dies when owner dies

• Normally, farmers are sole proprietors. They operate their farming businesses as the owner or boss of the working operation. Any other business owner who operates under the status of 'self-employed' also falls within this category of sole proprietor, such as the local electrician, plumber, and mechanic. Farmers do not have to apply for government certificates or status because they are assuming full responsibility for the business.
• The sole proprietorship is the oldest, simplest, and most common form of business entity. It is a business owned by a single individual. For tax and legal liability purpose, the owner and the business are one and the same. The proprietorship is not taxed as separate entity. The earnings of the business are taxed at the individual level, whether or not they are actually in cash. There is no vehicle for sheltering income. For liability purposes, the individual and the business are also one and the same. Thus, legal claimants can pursue the personal property of the proprietor and not simply the assets used in the business.