The Proprietary Sole

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In the corporate realm an Individual is deemed a Sole Proprietor, so what does this really mean? First it’s necessary to define the terms before moving forward. This is not to be confused with your spiritual or physical Soul, and it’s less than amusing how the spiritual realm is mirrored.

Sole definition \ ˈsōl \

  1. a: being the only one
    she was her mother’s sole support
    b: having no sharer
  2. functioning independently and without assistance or interference
    let conscience be the sole judge
  3. belonging exclusively or otherwise limited to one usually specified individual, unit, or group
  4. not married —used chiefly of women
  5. archaic: having no companion, SOLITARY
    ~ Merriam-Webster 1828

Proprietor definition
pro·​pri·​e·​tor | \ prə-ˈprī-ə-tər \

  1. one who has legal right or exclusive title to something : OWNER
    also : one (as a lessee) having an interest (as control or present use) less than absolute or exclusive right.
    Merriam-Webster 1828

In looking at the definitions a mixed message is observed, while Sole can mean only, a Proprietor doesn’t hold absolute interest or right! This is like the term Custodian, one you cares for someone else’s property. This is why parents are “Legal custodians” and fight for “Custody”, like it or not the state holds an interest in the offspring. Allow me to put this a little more simply, the cattle rancher owns the calves his cows produce. Does the term Chattel Property sound familiar? In the same way a Proprietorship isn’t exactly as it appears. In this corporate realm everything is commercial and a Sole Proprietorship is no different.

Sole Proprietorship –
This is a form of business involving one and only one owner. No special legal documents are needed to establish a sole proprietorship and really it is not even a distinct legal entity, separate from its owner. As a result, the owner is liable for all of the debts and liabilities of the business, but has total control of the business. If the business is to be conducted under a name, it is necessary to file an assumed name certificate (sometimes referred to
as a “dba”) in any county in which the business is to be conducted. The business does not file a separate tax return, although the owner must prepare a Schedule C to be included in his or her
individual tax return. While the assets of a sole proprietorship (including its name) can be sold, it is not possible to transfer a sole proprietorship to someone else.
[http://www.wba-law.com/]

This states that a Sole Proprietorship has one and only one owner, here’s an additional source identifying who a Sole Proprietor is.

Sole Proprietor –
A business run as a sole proprietorship does not have any legal separation between the company and the business owner. They are considered the same legal entity, and therefore, the business owner is personally responsible for all debts and legal obligations of the business.
[https://www.score.org/blog/sole-proprietor-vs-single-member-llc]

These references are showing something more specific, the personification of a legal entity, a Sole Proprietorship or more specifically a Juridic Person. When looking to see if there is any difference in filing requirements something very interesting is found, there is no difference! Have people been forgetting to attach a Schedule C to their return and write off the losses incurred by operating this Sole Proprietorship?
[https://www.irs.gov/businesses/small-businesses-self-employed/sole-proprietorships]

This still leaves one very obvious and serious question, do we want to act as a representative or agent for a man-made entity?
Consult a “Qualified” Public Accountant (CPA) for advice on these matters if you wish but keep in mind, “The tax system is based on Voluntary compliance”!
26 CFR § 601.602

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