One of the several types of businesses that exist is that of a proprietorship. A proprietorship is when there is one particular individual, or several individuals, who have been given the exclusive rights to a business. This means they own all the legal rights and are subject to all legal procedures regarding their business, the transactions of the business, and even the allegations that are brought forth against the business. The individual who has all of these rights is called the proprietor.
Becoming a proprietor occurs through the acquisition of a business, in which custody becomes the complete responsibility for one individual or for a group of individuals. With this type of business there is no distance between the actions of the business and that of the proprietors. If debt is accrued or if there is a complaint that is put against the business, it is subsequently a debt or a complaint that has been made against the proprietors as well. It is the legal responsibility of these individuals to take care of all aspects of the business.
Sole proprietorship means that one individual has all the exclusive rights to a particular business. From the financial aspects to the business details and customer service, each little facet is the responsibility of the proprietor. This means that legal actions that are taken against a business are made the responsibility of the proprietor. In regards to the aspect of income and taxes, this is where a sole proprietor has the advantage over corporations because it gives more money back to the business and the proprietor without the excessive taxing.
Proprietors are individuals who are given the exclusive rights and titles to a particular investment, like that of a business. With this exclusive title, the proprietors are able to conduct business under their own set of guidelines. They are allowed to hire individuals for work, create clientele bases, establish working relationships, and various other things.
The downside of proprietorship is that these individuals are legally responsible for all of the actions and dealings of the business venture. For example, if a business requires a new building in order to expand and become more prosperous, the proprietor can take out a loan for the new building under the name of the company and continue to expand. However, as the debt is that of the company, it is also the debt of the proprietors. Thus, the proprietors have to pay the debt back or legal action befalls them personally.
With proprietorship the individuals who are the proprietors have more control over the individual assets and how the finances are utilized. This makes the business malleable under the hands of those in charge and makes it a tailored investment to the proprietors. With larger companies, individuals do not always have a say in what happens with finances and what areas need to be refined.
Furthermore, proprietors pay significantly less when it comes to running their businesses than big businesses do. This means that more of the overall revenue goes directly to the proprietors and the business instead of being taxed or taken away in some other form.