As a sole proprietor one will be responsible to report all business profits as personal income. One must also pay self-employment tax on those profits in order to cover Social Security and Medicare.
Hard to Raise Capital
It is more difficult to raise capital as a sole proprietor. There are no partners, shares, or membership interests in a sole proprietorship. As a result, it can be tough to attract investors without first changing one’s business structure.
Setting up a sole proprietorship is no trouble, but it isn't a bad idea to be prepared.
Get in touch with us today and we can help you to find ways to limit your liability, teach you about the possible need for business licenses or DBA filing, and give you tax advice.