Yes, a sole proprietorship is permitted to employ people. Employing people, however, might result in an increase in obligations, such as acquiring workers’ compensation insurance and deducting taxes from employee salaries. A lawyer or accountant should be consulted to make sure you are adhering to all legal rules for employing people.
Being a single owner has a number of drawbacks, one of which is that you are solely responsible for any debts or legal problems that may develop in your company. This implies that your personal assets may be at danger if your firm is sued or incurs debt. Additionally, because you are only allowed to use your own money or take out loans, it might be challenging to attract cash for a sole proprietorship.
You will need to decide how to pay yourself if you decided to create an LLC rather than a single proprietorship. Taking a salary as an employee of the LLC is the most typical method of self-employment. As an alternative, you might be able to withdraw company profits, albeit doing so might have tax repercussions.
Due to its ease of setup and low startup costs, a single proprietorship might be a wise decision for budding business owners. Furthermore, you have total authority over the business and its activities as the single owner and operator. Before choosing whether business structure is best for you, it’s crucial to consider the benefits and drawbacks of a sole proprietorship and to speak with experts.