Business Structures in Utah: Sole Proprietorships

by Norris Law Group on October 14, 2014

Business Structures in Utah: Sole ProprietorshipsFor small business owners who are “hanging a shingle” for the first time, a sole proprietorship may be the easiest type of business structure to set up. A sole proprietorship is just that: one person is responsible for all activity in the business. Page 4-1 of the free online guide How to Do Business in Utah explains this.

The fact that there is only one owner of a sole proprietorship may count as a “pro” and a “con,” depending upon the situation. On the positive side, a sole proprietor has complete control over the business. He or she can open and close at will, and has complete freedom to decide the what, where, when, why and how of the kind of business to be transacted, fees and prices, expenditures, and raising capital.

But some of the freedoms that a sole proprietorship offers can also make this kind of business difficult to maintain as well. Capital can be hard to come by, especially in the current economy in which banks and other lenders are a bit hesitant to take on the risk of offering loans, especially to businesses that are small or haven’t been around for very long. Because of this, sole proprietors often go without capital or end up dipping into their own savings. A sole proprietor must also make sure that all of the taxes for the business are properly documented and paid. Perhaps most importantly, a sole proprietor and his or her business are one and the same. In the event of a lawsuit or bankruptcy, a sole proprietor and the business are viewed as one entity in the eyes of the court, and the owner is at risk of losing not only the business but personal assets as well.

All things considered, a sole proprietorship can still be the best choice for many business owners. A conversation with a skilled attorney with experience setting up businesses in Utah can help you make the right decision about how to structure your business.

Attorney Graham Norris and his associates at the Norris Law Group serve the residents of Utah County, UT and throughout Utah, Wyoming and Idaho. Contact them today at 801-932-1238 or online for a free consultation.

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