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Sole proprietorships - Coggle Diagram
Sole proprietorships
Formation and operation
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Most sole proprietors use some form of their own name, if they choose a name other than their name then this will be regarded as a business name and will be subject to the prohibitions and limitations
Sole proprietors are subject to much less regulation than partnerships and companies however that are required to comply with the relevant rules regarding tax
Must file their own tax returns, so must maintain adequate records of all sales and purchases
Once their revenue reaches a certain amount, they must register for VAT purposes
If they take on any employees, they must register for the PAYE scheme
Finance
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Could seek invesmtnent from outside persons but such persons would usually demand a share of the profits
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Two types
If the sole proprietor is a professional, they are called a sole practitioner
If the sole proprietor is not a professional, they are called a sole trader
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