California Sole Proprietorship San Diego
Operating a business as a sole proprietorship is an easy, inexpensive way to start a business, but the sole proprietor is subjected to the following risks and disadvantages:
• Unlimited personal liability against claims from lawsuits and creditors against the sole proprietor;
• Business liabilities discharged only through the personal bankruptcy of the sole proprietor;
• Raising capital from investors is not allowed; all funds must be contributed or borrowed by the sole proprietor; and
• All net income is subject to SECA self-employment taxes in addition to federal and state income taxes.
Despite the risks and disadvantages, a sole proprietorship can be the best form of doing business in certain circumstances. Contact San Diego Corporate Law for a consultation for help deciding if a sole proprietorship is appropriate for your business.