Notes on Unconscious Classism and Entity Rights for Sole Proprietors

Unconscious Classism and Elevating the Entity Rights of Sole Proprietors

I. Introduction

  • The article discusses the rights of sole proprietors and the concept of unconscious classism.
  • Key Concepts:
    • Critique of Lack of Attention on Sole Proprietorship Law: Sole proprietorship law often ignored in favor of larger businesses.
    • Importance: Sole proprietorships are vital to economies, constituting the most common form of business.

II. Sole Proprietorship Law is Ripe for Review

  • A. Solitary Alter Ego Theory of Sole Proprietorships:

    • Sole proprietorship legally seen as indistinct from its owner.

  • B. Legal Disadvantages:

    • Sole proprietors are personally liable for all business debts and obligations.

  • C. Distinction from Other Legal Entities:

    • Current views legally disadvantage sole proprietors compared to partnerships and corporations.

III. Legal Framework for Entity Status

  • Legal Entity Status:

    • Sole proprietorships should be legally recognized entities.
    • Comparison with other entities (Corporations, LLCs, Partnerships) showing a need for reform.

  • Complexity and Unique Issues:

    • Legal issues faced by sole proprietors require unique treatment under law.

IV. Unconscious Classism and Institutional Discrimination

  • A. Constitutional Considerations:
    • Equal Protection Clause does not currently support entity status for sole proprietors.
  • B. Public Policy Arguments:
    • Other business forms are recognized as legal entities, implying parity should also be given to sole proprietorships.

V. Arguments Against Entity Status

  • A. Flaws in the USPA:
    • Challenge suggesting that one person cannot be a separate entity.
  • B. Implied Limited Liability Concerns:
    • Entity status could mislead to expectations of limited liability.
  • C. Perpetual Life Argument:
    • Critique that perpetuity contradicts sole proprietorship's identity linked solely to its owner.

VI. Entity Equality to Remedy Classism

  • Call to Action:
    • Recognizing sole proprietorships as legal entities for fairness and support economic growth.

Appendices

  • Appendix A: Entity Features Comparison Chart.
  • Appendix B: Proposed legal changes under the Uniform Sole Proprietorship Act (USPA).
  • Appendix C: Statistics on distributions of sole proprietors by gross receipts, tax year 2003.