Brewer, Pritchard & Buckley, P.C.
Contact Brewer, Pritchard & Buckley, P.C. at
800-236-7468

Consider liabilities before entering a sole proprietorship

A sole proprietorship is a simple business form in which one person owns the business. It’s common for small, locally-run businesses to start out this way. Operating a business under this formation can be financially beneficial. The owner avoids big corporation taxes. Additionally, there’s no middleman, so owners have complete control in the decision-making process.

Sole proprietorship presents unique liabilities

The benefits of owning a sole proprietorship are clear. However, it’s important to be aware of the liabilities that come along with this type of a business formation, such as:

  • Debts: There’s a possibility your business might fall into some debt. If this occurs, it becomes your personal debt. You will be responsible for managing and paying off the debt. Creditors are also able to sue you personally.
  • Creditors, again: In continuation, all your debts would be connected. If you’re dealing with personal debt, creditors oftentimes go after your business profits.
  • Torts or injuries: The owner of a sole proprietorship is liable for any injuries that occur in relation to the business. To add a layer of protection, it’s wise for business owners to purchase liability insurance.

Any type of business formation comes with some liabilities. It takes research and professional guidance when picking the right one. Sole proprietorships offer unique benefits as well, which include mixing assets and tax breaks.

Legal documents are not required when forming a sole proprietorship. However, some owners choose to register with the secretary of state. In doing so, they can obtain separate tax and employee identification numbers. It’s wise to seek legal help when going through this process. Doing it alone could result in errors, delays and other costly mistakes.

No Comments

Leave a comment
Comment Information
Email us for A response

Send A Message To Brewer, Pritchard & Buckley, P.C.

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

Important notice: Thomas C. Pritchard is a retired member of Brewer & Pritchard, P.C. Mr. Pritchard's address is 800 Bering Drive, Suite 201, Houston, Texas 77057. Brewer & Pritchard, P.C and Thomas C. Pritchard have shared the cost of this advertisement.

Referrals: Please note that as a general matter, Brewer & Pritchard, P.C. does not handle non-litigation matters. Brewer & Pritchard, P.C. refers all its non-litigation or "transactional" matters to Thomas C. Pritchard, who is a retired member of the firm. Thomas C. Pritchard does not handle any litigation cases and as a general matter, he refers all litigation cases to Brewer & Pritchard, P.C. Brewer & Pritchard, P.C. and Thomas C. Pritchard have no other relationship to each other and do not share fees if or when a case or matter is referred by one to the other.

Not board certified: None of Brewer & Pritchard, P.C., J. Mark Brewer nor Thomas C. Pritchard is certified by the Texas Board of Legal Specialization.

close

Privacy Policy

Our Location:

Contact Us:

Brewer, Pritchard & Buckley, P.C.
770 South Post Oak Lane
Houston, TX 77056

Toll Free: 800-236-7468
Map & Directions