Texas Business Attorney

Sole Proprietor Risks

Many people think that opening a small business is an easy process and involves minimal risks. In Texas, however, sole proprietorship carries with it some risks that are unique to the state. It is for this reason that the Texas business lawyers of Slater and Kennon are here to help with all of your business formation needs.

In Texas, the owner of the business has owner responsibilities risks. As the sole proprietor of the business, everything is in your name and you are responsible for everything that goes on in the business. This includes debts and assets. Basically, anything that can happen in a business is tied to you as a person. Nothing is separate.

Another risk of being the sole proprietor arises in the funding area. A sole proprietorship cannot sell stocks to raise funds like other types of businesses. Hiring employees creates another problem. Should any of a sole proprietorship’s employees become injured or upset, the one person at the head of the company is responsible and has to deal with everything that his or her employees send at him.

Another issue involves health insurance. If you’re the only employee of your own company and you have health insurance from a different source, then there shouldn’t be a problem. When you hire others to work for you, it can become a problem. Some people may be willing to work without health insurance but if you don’t offer health insurance, it seriously cuts down on the number of people to choose from for the position. This could create a problem in the caliber of worker you can hire.

These are just a few of the risks of being the sole proprietor of your business. Although these may seem like minor details, they can become big. The Texas business lawyers of Slater and Kennon are here to advise you on what form your company should take and to help you adopt whatever form on which you decide to take.


Centrally located in the Arboretum area of north Austin, the Slater & Kennon law firm represents clients in Travis County, Bastrop County, Burnet County, Williamson County, and Hays County, including the cities of Austin, San Marcos, Bastrop, Burnet, and Georgetown.