How is a sole proprietorship formed and operated?
There almost are no legal formalities to forming a sole proprietorship, so its relatively easy. The main step is obtaining a federal employer identification number from the IRS by filing Federal Form SS-4. If you have employees, you must withhold income tax and FICA (Social Security) from their checks and deposit it with the government. You (the business) also have to pay FUTA (unemployment) and a matching amount of Social Security for them. As the owner, you pay Social Security through the self-employment tax rather than FICA, and you have to make periodic estimated tax payments on income from the sole proprietorship. What is a partnership? A partnership is simply an association of two or more persons, as co-owners, who carry on a business for profit. How is a partnership formed and operated? A partnership can be either a general partnership or a limited partnership. In addition, a general partnership may be registered as a limited liability partnership (LLP), which provides certain l
