A sole proprietorship is the simplest structure. It is run by one person or a group with no distinction between the business and the owner. The owner is entitled to all profits and is responsible for all the business debts, losses, and liabilities.
ADVANTAGES OF A SOLE PROPRIETORSHIP:
* Easy and inexpensive to form
* Owner has complete control
DISADVANTAGES OF A PROPRIETORSHIP:
* Unlimited personal liability
* Hard to raise money
* Heavy burden
The owner is responsible for all successes and failures of the business. Before setting up a sole proprietorship, as an owner you should seek advice from a lawyer or other business professional.
An owner does not have to take any formal action to form a sole proprietorship at the State level. For the reason that the owner and business are one in the same. The business itself is not taxed separately. However, your municipality may require that you register your business.
For more information select the STARTING A BUSINESS link to access the New Mexico Economic Development Department. The link will take you to the Business Resources Center. Scroll down the page and select the Structuring a Business link. Scroll down to Sole Proprietorship.
For additional information select the CHOOSE YOUR BUSINESS STRUCTURE link to access U.S. Small Business Administration.