Areas of Expertise
A proprietorship is a business owned and run by one individual. There is no legal distinction between the business owner and the business.
As a proprietor, you will receive all the revenue for the work you perform. You will also be responsible for all your business expenses, losses, and debts and taxes.
A proprietor may operate under their “Personal Name” without registration.
If carry on business under a business name other than your own such as:
- “Personal Name, Specialty” or
- “Specialty Name”
You must register your business name through the Ontario Ministry of Government Services under the Business Names Act and get your Master Business License.
Your business name registration is valid for 5 years. To continue using the name it must be renewed before the expiry date.
Some Advantages of Being a Proprietorship
A proprietorship is the simplest business form. It is easy to set up and organize, needs only small amounts of capital, and you can start immediately.
You are the owner of your business and that permits a high degree of flexibility for your business. The administration and accounting for your proprietorship are simpler than a corporation.
Your personal income tax return and annual Harmonized Sales Tax (HST) return are due by June 15th.
You receive all the profit from your business. Your ability to generate income is not limited when compared to an employee. You are only limited by the amount of effort you are willing to invest.
Some Disadvantages of Being a Proprietorship
You are the business, and ONE can be a lonely number. You are in charge of everything. You must do all the work or supervise others, and are responsible for your success or failure
You may find it difficult to separate family time from work time if working from home. Some people find their role as spouse or partner, and/or parent can interfere with their business.
Your cash flow is usually periodic. Unlike an employee with a regular paycheque, you only earn money when you make a sale and the sale closes. Life can get rough between sales. You must still pay your living and business expenses when they are due.
Financing your business is difficult. There are usually no material assets in your business. You will likely have to pledge personal assets of value to get a business line of credit.
Your personal assets and business assets are all exposed to your creditors. Your creditors may force the sale of your assets and your personal property to meet their claims.
Your business will stop operating if your die or become ill and can no longer work. You are the business. When you stop operating there may be no business to sell. Your proprietorship ceases to exist.
You will not be eligible to collect Employment Insurance.
BEING A PROPRIETORSHIP
The advantages of self-employment out weigh the disadvantages in the minds of all entrepreneurs.
Owning a business can be an exciting adventure and sometimes a terrifying experience. There is a lot to know. Whether you are:
- A Real Estate Agent Buying Or Selling Property
- A Chef Operating A Restaurant
- A Personal Trainer Operating A Gym
- A Commissioned Sales Agent
- An Online Sales Organization
- A Painter Of Homes
- A Gardener Or Lawn Care Specialist
- A Dog Walker
- A Retail Store Owner
- A Home Security Installer
- And The List Goes On And On…
There are many opportunities in developing a proprietorship business. An opportunity exists for any type of business. You need at least one valuable skill to provide a valuable solution for customer service.
Many types of proprietorships don’t need much money to start, especially if you can work from your home. You can start with family, friends, and neighbours, ask for referrals, and build from there. You can build a service business into a great business If you are willing to work hard.
Some businesses will need a location outside your home. This makes the business a little more complex and expensive to get started. But, the rules are the same.
Since the beginning of time, there has been a constant demand for people who can solve problems. That is where you and your proprietorship business can help. Think of all the areas of ability you have to help potential customers.
Many people starting a business either think or are told, they should incorporate. A word of advice – DON’T INCORPORATE when you start your business. Wait a while. There are advantages to being a proprietorship when starting a business. If you have questions, Let’s Talk. See the link below.
You are the expert in your business. Your focus is on marketing, sales, and customer service. You want to concentrate on growth and success.
Often administration, bookkeeping, accounting, cash flow planning, and taxes can get put aside. Left undone. This is where I come in. I can assist in maintaining your accounting needs. And, I can help you develop a plan to achieve all of your business goals.
Hopefully, this is the beginning of our relationship. I would like to learn more about you. The best way to get connected is to complete the form below and book a conversation.