LAW 122 Study Guide - Final Guide: Sole Proprietorship, Legal Personality
12 May 2016
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She sells her custom knitted cat sweaters on esty. She started selling the sweaters as a hobby, but it turns out that there is high demand for cat sweaters. Edwina soon has a thriving little business and she is making a lot of money. Note that she has not registered the business in any way; it"s just her, edwina, creating cat sweaters, selling them, and pocketing the money. She is wondering how she is supposed to deal with this money at tax time. Explain your answer, taking care to reference the law and apply the law to the facts. A sole proprietor"s income is taxed as the sole proprietor"s personal income. In a sole proprietorship, there is no separation between the business and the individual running the business. /the sole proprietor is the business. /the business and the sole proprietor are the same legal person. Edwina is a sole proprietor. /edwina and her business are the same person.
