Legal Forms of Ownership for Small Businesses

As part of our employment and labor law discussion for small businesses, we recently discussed an introduction to the Occupational Safety and Health Act of 1970 (the “OSH Act”). Today, we are turning to a new discussion about legal forms of ownership for small businesses, beginning with an overview of sole proprietorships.

A sole proprietorship is an entity owned and managed by one individual. This form of entity is reported on the sole proprietor's personal tax return via a Form 1040 Schedule C.

The pros of a sole proprietorship are that it affordable and easy to establish and the sole proprietor has full control over the business entity. On the other hand, the cons of a sole proprietorship is that the sole proprietor has limitless personal exposure to risk.

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*This blog post should not be construed as legal advice on any specific facts or circumstances. The contents are intended for general information purposes only.