In Oregon, a sole proprietorship is the simplest form of business organization. It allows an owner to avoid many of the organization and operating costs of other forms of businesses, as there is no legal separation between the business and owner. Forming a sole proprietorship does not involve the complexity necessary for other business organizations and is as simple as dedicating a share of the owner's assets to the business operations. Dissolving the business does not require a complicated plan to transfer business assets back to the owner of the business.
The owner of the sole proprietorship maintains control of all business decisions. There is no requirement to comply with the formalities of an operating agreement or bylaws and no requirement to compromise with partners or satisfy shareholders. However, a sole proprietorship must comply with regulatory and licensing requirements, contracted obligations, and other agreements made during operation of the business.
A sole proprietorship requires planning to provide the liability protection of other types of businesses. The owner of the sole proprietorship is responsible for all the risks of running the business. Meaning a creditor can collect debts from the personal assets and/or the business assets of the owner. Limited protection is often available at a premium through insurance. Additionally, a sole proprietor can negotiate protection through careful drafting of contracts between the sole proprietorship and its vendors and customers.
A sole proprietorship may be the right choice for you, speak with an attorney to review the possibilities.
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