What form should your small business take? The options open to you are varied depending upon the company in which you reside. As Michael Quinn, an accountant and attorney, explains the advantages and disadvantages of running your business as a sole trader in Australia. The arrangement would be roughly analogous to being a sole proprietor here in the U.S. Is this option the right for for your business?
Sole Trader: What Form Should Your Business Take?
Posted by HeatherStone under LegalFrom http://www.flyingsolo.com.au 4211 days ago
Made Hot by: ObjectOriented on April 29, 2013 11:03 pm
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4211 days ago
Two problems with sole proprietorship here in the U.S. (as elsewhere I'm sure) are taxes and liability. I'm not an attorney so this is based on my limited knowledge of how businesses here are set up based on asking a lot of questions. First, if you are essentially self-employed in the U.S., you face double the level of unemployment tax as everyone else because you end up paying your own personal unemployment tax plus essentially the company's half of unemployment. That's the part your employer would be responsible for, if you had one. However, since you work for yourself, my limited research suggests it is very difficult for you to ever collect the unemployment you are paying in, because, essentially, if you're self employed, you can't really lay yourself off, no matter how bad business gets. Some of these issues can be resolved by incorporating (for example forming an LLC.) This kind of incorporation can also be important for liability purposes to prevent someone from attaching personal assets in a suit against your business. Again, I'm no attorney, so anyone reading this would need to double check everything I'm saying with a qualified expert, but it does seem to make the idea of being a sole proprietor, in a strictest sense, a bit tricky.
4211 days ago
4211 days ago