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Sole Proprietorships Are Ok

By Mark Shapiro

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Published: 28Feb2012
Word count: 842
Viewed: 79 time(s)

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I'm a judgment expert that writes too much. This article is my opinion, to oppose some inappropriate preconceptions I have heard and read, bashing sole proprietors.

"We refuse to do business with anyone who is not part of a real LLC or corporation", is a phrase I hear too often. That idea is only sometimes reasonable.

A sole proprietor is owned by one person (or married couples sometimes), and are not corporations. The expenses saved, compared with starting and operating a corporation or a LLC, are giant. A sole proprietor is ideal for little businesses without employees, or internet-only businesses.

If one is buying life insurance, electrical utilities, paying for your child's school, or major appliances; you would want a large business having abundant assets, and not small sole proprietorship companies.

If you purchase items from a small store, EBay, or any services from companies or web sites that do not charge you money upfront; a corporate entity or absence of a corporate entity, doesn't actually matter. In these situations, there is no more risk when doing business with a sole proprietor is, than there would be with a corporate business.

The power of a corporate entity, is if they are big, they could carry on when a valuable person becomes sick, dies, or quits.

Corporate power is the quantity of their workers multiplied by the quality of its workers, multiplied by its financial assets.

The opposite is also true, if a business is low on of skilled people and money; competence and service usually suffers.

When a LLC or corporation has just 1 or 2 people managing, owning, or working for it, it actually is not any stronger than a sole proprietor is.

Most people believe that doing business with LLCs or corporations is safer. However, when one gets ripped off and must sue someone, its often much easier to collect a money judgment from a typical individual, than from a typical company.

Different than people, a company may change names or fold overnight.

There is a large number of tricks handy for devious company judgment debtors, including moving assets to other corporate entities (occasionally having a deceptive or concealed ownership of the other entity), or having cohorts that record insider liens on the company, etc.

As with a person, companies may develop trouble. Certain corporate entities continue operating after they are dissolved or suspended. Be careful when dealing with a suspended, dissolved, or bankrupt business.

Companies may apply for bankruptcy protection nearly as easily as people could. A company debtor could have a lot more creditors than a sole proprietor would, as fewer entities format or loan large amounts of money to sole proprietors.

To summarize, don't reject a business only because of its corporate status, or lack of it. Many valuable and skilled businesses are run as a sole proprietor. Some sole proprietors last much longer than large businesses do. Corporate entity or not, stay cautious if you pay upfront for anything.

http://www.JudgmentBuy.com - where Debts and judgments quickly get enforced by an expert - matched expertly for free, to the debtor. Mark Shapiro, a expert on judgments. We pay for leads, and offer the best no obligation free leads for collection agencies, enforcers, and contingency collection lawyers.

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