Sole proprietorship (personal business)
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At Sundgaard, we have extensive experience with all aspects of insolvency, bankruptcy and financial distress. We are qualified to help you or your business manage any financial challenges.
Sole proprietorship (personal business)
Many choose to run their business as a sole proprietorship (a personal business with full liability). The advantage of this is that you do not have to spend money on founding a company, just as you can quickly shut down the company again if you regret the start-up. In addition, the personal business is often most attractive from a tax point of view. If the business makes initial losses, they can be deducted from the owner’s personal income. A personally run business is not an independent subject to tax. This means there is tax transparency between the business and the person who runs the company.
The down side is that you are fully liable for the debt – whereas companies have limited liability. Running a sole proprietorship can put you at risk of becoming financially distressed yourself.
Sometimes the “pros” outweigh the “cons” – other times they do not.
