proprietor

Examples of proprietor in the following topics:

• Pros and Cons of Sole Proprietorship

  • The sole proprietorship is one type of business structure in the US that does not require formal incorporation, meaning that sole proprietors do not need to formally file articles of incorporation, hold regular meetings, or elect an advising or directing board.
  • This simplicity is also reflected in tax treatment, as a sole proprietor files taxes as personal income.
  • Sole proprietors also have control over the aspects of their business without the involvement of elected board members.
  • As a result, if the proprietor dies, the business ceases to exist.

• Pros and Cons of a Partnership

  • Because sole proprietors can only have one owner, the partnership is the simplest structure open to collaborative ownership .

• Forms of Business Organizations

  • Sole proprietors are the most numerous businesses in the United States, and they usually own farms, grocery stores, hotels, and restaurants.

• Cash

  • Often, these businesses owe money to suppliers and to tax authorities, and the proprietors do not withdraw all their original capital and profits at the end of each period.

• The Financial Statements

  • The Statement of Changes in the Owner's Equity is the third financial statement and shows the changes in the owner's equity.For all business organizations, profits or net income always increases equity because the organization has more resources flowing into it.However, proprietors and partners could invest and/or withdraw from the business.Thus, investment increases the equity, while withdrawals reduce it.For corporations, the Statement of Changes in the Owner's Equity is called the Statement of Retained Earnings.We show an example in Table 5 for XYZ Corporation.Profits or net income increases retained earnings, while dividends declared decreases it.Dividends are similar to a proprietor's or partners' withdrawals.If the corporation issues more stock, then the corporation increases investment and records this transaction under the Stockholders' Equity.

• Characteristics of a Corporation

  • By contrast, sole proprietors and partners in general partnerships are each liable for all the debts of the business (unlimited liability).

• Balance Sheet Analysis

  • Often, these businesses owe money to suppliers and to tax authorities, and the proprietors do not withdraw all their original capital and profits at the end of each period.