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One of the key benefits of an LLC versus the sole proprietorship is that a members liability is limited to the amount of their investment in the LLC. Therefore, a member is not personally liable for the debts of the LLC. A sole proprietor would be liable for the debts incurred by the business.
The main distinction between the two is that a sole proprietorship and the owners are one and the same, while a single-member LLC provides a divide between the two in both legal and tax matters.
start-up costs are low. you have maximum privacy. establishing and operating your business is simple. its easy to change your legal structure later if circumstances change you can easily wind up your business.
Choosing to be a sole proprietor vs LLC doesnt directly have anything to do with taxes. Even if you form an LLC, youll continue to pay taxes as a sole proprietorship, where the profits pass through to the owners personal income. This is the default tax treatment for single-member LLCs.
Arizona is a community property state and a husband and wife can operate as a sole proprietorship. The creation of a business as a sole proprietorship requires no formal Arizona filing (as would be required for a corporation or limited liability company, for instance.)
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7 Steps to Start a Sole Proprietorship Decide on a Business Name. Register Your Business DBA Name. Buy and Register a Domain Name. Apply For An EIN. Obtain Business License and Permits. Get Business Insurance. Open a Business Bank Account.
How to Establish a Sole Proprietorship in Arizona Choose a business name. File a trade name with the Secretary of State (optional). Obtain licenses, permits, and zoning clearance. Obtain an Employer Identification Number.
Documents Required For A Sole Proprietorship Aadhar Card. Aadhar number is now a necessity for applying for any registration in India. PAN Card. You cant file your income tax return until you get a PAN. Bank Account. Registered Office Proof. Registering as SME. Shop and Establishment Act License. GST Registration.
How to start a sole proprietorship Step 1: Assess your risks. Step 2: Get an Employer Identification Number (EIN) Step 3: Name your adventure. Step 4: Pay estimated taxes. Step 5: Register for taxes. Step 6: Obtain licenses and permits.
An LLC exists separately from its ownersknown as members. However, members are not personally responsible for business debts and liabilities. Instead, the LLC is responsible. A sole proprietorship is an unincorporated business owned and run by one person.

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