Hello and thank you so much for your question. The pros and cons are as follows:
- Sole Proprietorship - Is an individual who owns a business but is not a legally separate entity from the business.
- Reports income on Form 1040 Schedule C.
- It is personal liable for any debts or financial claims against the business.
- Pros-Most accessible type of business to start.
- Cons-Personally liable for business debts or legal liabilities and Need to pay SE Taxes
- Single-Member LLC - Single-member LLCs with only one owner.
- Reports income tax on form 1040 Schedule C unless it files Form 8832 and elects to be treated as a Corporation.
- It provides the owner with Limited Liability Protection.
- Pros-Single-Member LLC are taxed like Sole Prop and it does have the limited liability protection.
- Cons-Single-Member LLC owners need to pay Self-employment taxes
I hope this answered your questions. Have a wonderful day
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