Sole Proprietorship info

A sole proprietorship is a business entity in which all of the assets of the
business are owned by one person, called the “proprietor.” If your business has
a name, that name would be “d/b/a” (doing business as) after your name.

Because a sole proprietorship is not a separate legal entity, the proprietor is
personally responsible for all business debts and legal claims against the
business.

YES. One method of protection is to buy sufficient liability insurance coverage
for your business. This will help protect your personal assets from claims,
provided that the claims do not exceed the coverage limits of the insurance
policy.

Another method is to write strong, enforceable contracts -- and be sure to keep
your promises.

YES. First, all liability insurance policies have per-claim limits such as
$1,000,000. The cost of the policy will be affected by the amount of coverage
you select as well as the type of products or services you provide. If claims are
made against your business that are in excess of the insurance coverage, you,
as the sole proprietor, will then be liable for the difference.

Second, insurance covers only tort claims for negligence -- accidents, not
intentional acts. Insurance usually will not cover a loss for a claim based on
breach of contract or arising from an employee or landlord dispute.

All income from the business is directly taxable to the proprietor.