A Sole Proprietorship is operating as yourself. You are your business and the business is you.  This is the easiest form of operating a business but also is the most dangerous, next to a General Partnership.  We do not recommend operating a business as a sole proprietorship under any condition.

Advantages

· Ease and Cost of Formation

·Simple Record Keeping

· Income and Deductions: are reported on Schedule C of personal tax return

Disadvantages

·Unlimited Liability Exposure

· No Asset Protection

· Severely limited Tax Benefits

·  Increased Audit Rates

Must be profitable in 3 out of 5 years