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If the sole proprietorship is operated under your name, the new operator would have to either use his name or file a business name with the appropriate local government.
The type of business entity you create affects both your role within the company and how the company operates.
Because of this, it's important to take the time to better understand each option before making your decision.
It typically takes the form of a single individual in business as the sole owner of the company.
In many cases, the owner of the sole proprietorship is also the only employee as well, though this doesn't have to be the case.
This may leave you wondering which is the best entity type for your business or even asking, "What are different types of business ownership?
" It can be very confusing if you aren't familiar with the different types of ownership and the advantages or disadvantages of each.Joint ventures are another form of partnership, though they are typically created with a specific goal or a limited time frame in mind instead of being created to operate indefinitely.There are a few other forms of partnerships available as options as well, though these are typically reserved for special cases or are only open to certain professions or operating styles.As the business does not exist as a separate legal entity, there is no way for the owner to shift responsibility to the business itself.While it is not strictly possible to sell a sole proprietorship because it does not exist as a separate legal entity, one might sell any assets associated with the business and allow another individual to take over operation.Certain business types may open you up to legal and financial liabilities, though they also give you more control over the company as a whole.Others may reduce this liability but have up-front creation costs and more oversight at the state or federal level.Each type of ownership functions differently and places you in a slightly different role within the company.There are different advantages to each business type and also specific requirements that you have to meet in some cases.Limited liability companies create a separate legal entity that can bear at least some of the liability for debt and legal action, reducing or eliminating the liability faced by the business owner or owners.The business structure is similar to a corporation, yet the business itself is much less structured than a full corporation and provides the owners with the same sort of flexibility that one sees with a general partnership.