written by | September 28, 2022

What are some of the Examples of Sole Proprietorships?

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A business with a single owner that is not organised as a corporation, partnership, or Limited Liability Company (LLC) is referred to as a sole proprietorship. A solo owner can run a small business or function as an independent contractor. Businesses owned by sole proprietors span a variety of sectors. 

Numerous home-based enterprises are run by solo entrepreneurs. You can determine if a sole proprietorship is the best business structure for you by understanding typical sole proprietorship operations.

Did you know? 

As a sole proprietor, you can be your own boss and set your timings. You will bear all the profits or losses too. 

Or 

As a sole proprietor, your tax liability will be the same as your personal tax liability, but you can set off your business expenses. 

Who is a Sole Proprietor ?

The business owner in a sole proprietorship is the sole owner of the firm and is subject to all earnings. They are also personally liable for all debts, obligations, and losses incurred by the company. 

As with corporations or LLCs (Limited Liability Company), the proprietor is not obliged to formally register their business with their state. A sole proprietorship is the easiest firm to establish or dissolve because there is minimal paperwork needed, which makes it popular among independent contractors, advisors, and entrepreneurs with small businesses

Here is a list of some of the most famous sole proprietorships examples

Also Read:  Best Business Ideas for Students in India

Examples of Sole Proprietorships

Bookkeeping Company.

An accounting company provides for the financial requirements of other companies. Revenue, costs, and other financial information are entered by a bookkeeper into an accounting information system. This provides business owners with reliable financial data about their companies. A bookkeeper's financial records are utilised to compile tax returns for businesses.

Financial Advisor.

Financial advisers who operate as sole proprietors serve both individuals and small enterprises. Families can use their assistance to invest in equities, save for education, and establish a retirement plan. A business may receive assistance from financial planners who work with businesses in setting up its employee retirement plans and other employee perks.

Landscape Contractor.

A landscaper may recruit a limited team of workers or work alone. Landscapers look after the trees, plants, and lawns of individuals and companies. The majority of landscaping businesses that serve commercial clients use workers for projects. A landscape contractor business is a popular sole trader business example.

Computer Maintenance Services.

Many times, computer repair businesses are run by lone proprietors. While some business owners work from offices, others run retail stores. Small computer repair shops frequently serve customers by themselves. Computer maintenance services is one of the most famous sole proprietorship examples.

Freelance Writers. 

Numerous print and digital publications, including journals and websites, rely on the content that freelance writers offer. They frequently contribute blog posts, articles, and other informative materials to publications that focus on particular industries, causes, and hobbies. These writers’ work is an ideal example of a sole proprietorship because they are independent workers as their title suggests.

Tutoring Services.

An excellent sole proprietorship business example is the businesses that offer tutoring, assisting students in learning a variety of topics. Tutors can communicate with students in-person or via video chat online. Numerous tutors have a background in education or possess an in-depth understanding of the area of study they are going to teach.

Online Assistant.

Through the internet, virtual assistants support business owners with administrative tasks. The requirements of the clients determine the duties that virtual assistants do. Monitoring emails, making Excel spreadsheets, and drafting documents are examples of frequent tasks given to an Online Assistant. 

Franchise. 

It may be surprising for people to learn that a franchise owner can also operate independently. The franchisee receives payment from the franchiser in exchange for the franchisee's use of the company name. Whenever it comes to taxes and other financial duties, an individual franchisee is regarded as an example of sole proprietorship. This strategy can be very successful for a sole proprietor with limited business experience because the franchiser will supply the company model along with assistance for marketing and management.

Freelance Photographers. 

On-location photo shoots for occasions such as marriages and other special events are offered by independent photographers, who may work from their homes or from a studio. Many independent photographers launch their careers with nothing more than a camera, a laptop or desktop, and a vehicle to bring them to the venues. This kind of small-business proprietor can file for a "Doing Business As" (DBA) name and deduct business costs because they are a sole proprietor.

Plumber.

Some plumbers are hired by building firms and municipal or local agencies to maintain homes, businesses, and factories. But on the other side, several plumbers work for themselves as independent contractors for building projects or provide services to the general public. In order to establish a brand without needing to invest time and money in applying for a professional business structure, a sole proprietorship is an excellent way to launch a plumbing company.

Graphic Artist.

For companies, graphic designers provide advertising material including flyers, pamphlets, and insignias. When not working for a sales or advertising firm, the majority of graphic designers work from home as independent contractors. This explains why a sole proprietorship is ideal for the company's licensing and tax benefits needs. The business of a graphic artist is a perfect example of sole proprietorship.

Daycare Owners.

Establishing an in-home daycare service can be a lucrative example of sole proprietorship, but there are several state rules that must be followed, including requirements for liability insurance and cleanliness and safety standards in your house. While establishing a sole proprietorship is a practical company structure, individuals should check their state's regulations before bringing children into their households to avoid facing any future legal repercussions.

Direct Selling.

To give an example of sole proprietorship, direct selling is the easiest one to explain. With thousands of individuals selling anything from diet drinks to beauty items, direct sales is a multi-billion dollar business. The majority of sales representatives or direct sellers are freelance contractors, which means that even if they are connected to a much bigger company, they are responsible for their individual taxes and invoicing.

Fitness Professional.

This is one of the most popular sole proprietorship business examples. To assist people in achieving their health goals, individuals can establish a sole proprietorship if they are certified to teach yoga, or fitness programs, or are personal coaches. Nevertheless, people require liability insurance because their practice will have an impact on their client's health. Before starting your business, make sure to research the regulations in your state, especially if you plan to operate from home.

Housekeepers. 

The ideal option for someone who runs a housekeeping business might be a sole proprietorship. As we discussed landscaping, these kinds of enterprises typically expand beyond the control of a single owner. So there may come a point when the owner may wish to reorganise the organisation into a different model of operation that's optimal for financial, operational and tax considerations.

Also Read: Business Name Ideas with Brand Name Generators - List of Most Unique Business Name Ideas

Benefits of Being a Sole Proprietor.

Simple and Affordable. 

The most straightforward and affordable small business structure to set up is a sole proprietorship. Low-cost legal fees are only used to pay for the licences or permissions that are required. You are not even required to register your brand names to start working as a sole proprietor if you operate under your own name exclusively. Due to this, sole proprietorships are excellent for start-up companies, independent contractors, and part-time and home-based companies.

Complete Control.

As the only owners of the company, sole proprietors are in total charge of all actions. They are not obligated to convene shareholder meetings or have voting on operational decisions, unlike corporations.

Simple Tax Preparation.

Whenever it comes to paying taxes, sole proprietorships are much easier to run. It is simple for sole proprietors to comply with tax disclosure laws since all business income is stated on the personal tax form, which eliminates the necessity to file a distinct business tax return from your personal tax return. 

Moreover, due to this pass-through tax benefit, tax rates often seem to be the lowest of the available business structure choices. The personal tax return will show pass-through earnings, which are taxed as individual income.

Flexibility. 

Capital losses can be carried forward or backwards, offset against other types of income, or both during tax season. As a result, a sole proprietorship that has recent losses may be able to offset such losses against personal income. Because of this, starting a sole proprietorship is the best option for people who want to go from being an employee to being their own boss over time.

Also Read: Best Small Business Ideas Under 1 Lakh

Conclusion:

One of the easiest and most straightforward types of small company owners is the sole proprietorship. You serve as the only employee of a sole proprietorship, making it simple to start and run, and it offers independent contractors and business owners in a variety of industries a straightforward organisational structure. Even though sole proprietorships are the most prevalent type of entity and are much easier to set up, there are several factors you should take into account before choosing this sort of structure for your new business. 

Compared to tech corporations, they are unquestionably more relevant to smaller local businesses. Another important factor is taking full responsibility for one's actions. One of the key draws of individual entrepreneurship is the temptation of total control. For tax considerations, you should consult an accountant to determine which structure is best for your new company. 

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FAQs

Q: Can someone become a partner in a sole proprietorship?

Ans:

No, a sole proprietorship has only one owner, its sole proprietor. You would need to switch to one of the numerous different corporate structures, such as an LLC, Limited Partnership, or other pass-through businesses, in order to add a partner to a sole proprietorship.

Q: Do sole proprietors have to file taxes on their earnings?

Ans:

Yes, running a sole proprietorship counts as self-employment. Self-employment taxes, central income taxes, state and regional taxes, and possible income tax withholding requirements may all apply to any company profits resulting from the company's revenues.

Q: Is a sole proprietorship allowed to employ people?

Ans:

Yes. Owners can recruit staff even if a sole proprietorship isn't really a company. There is no limitation on the number of workers a single entrepreneur can hire. But as the employer, the sole proprietor is in charge of all tax filings and personnel administration.

Q: Is sole proprietorship registration required?

Ans:

Generally speaking, running a sole proprietorship is not subject to central or general registration requirements. Different laws, though, can apply in some states.

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Disclaimer :
The information, product and services provided on this website are provided on an “as is” and “as available” basis without any warranty or representation, express or implied. Khatabook Blogs are meant purely for educational discussion of financial products and services. Khatabook does not make a guarantee that the service will meet your requirements, or that it will be uninterrupted, timely and secure, and that errors, if any, will be corrected. The material and information contained herein is for general information purposes only. Consult a professional before relying on the information to make any legal, financial or business decisions. Use this information strictly at your own risk. Khatabook will not be liable for any false, inaccurate or incomplete information present on the website. Although every effort is made to ensure that the information contained in this website is updated, relevant and accurate, Khatabook makes no guarantees about the completeness, reliability, accuracy, suitability or availability with respect to the website or the information, product, services or related graphics contained on the website for any purpose. Khatabook will not be liable for the website being temporarily unavailable, due to any technical issues or otherwise, beyond its control and for any loss or damage suffered as a result of the use of or access to, or inability to use or access to this website whatsoever.