You don't need to file paperwork to start a sole proprietorship. But there are some things you may want to consider to get the most out of your business.
If you're in business for yourself and you haven't created a formal business structure, then chances are,
you're already a sole proprietor–so make sure you understand the implications.
Sole proprietors are personally liable for the debts of their business. If the business is sued, your house, savings, and other personal assets are at risk.
A sole proprietor is responsible to report all business profits as personal income, and pay self-employment tax on those profits, to cover Social Security and Medicare.
A sole proprietorship is simple to start, but that doesn't mean you should let your guard down.
A little preparation goes a long way.
If you're a sole proprietor, the legal name of your business is your own name. In most states, if you want to operate the business under a different name, you'll need to file for a DBA, "doing business as."
You may need state or local permits and/or licenses to legally operate your business. We can help you figure out the business licenses you need.
As a sole proprietor, you'll be personally liable for your business's debts and other liabilities. You may want to consider operating as a limited liability company (LLC) instead, so you're better protected.
Business taxes can be complicated. Once you join our Business Advantage Pro legal plan, our partners at 1-800-Accountants can help you prepare and file your tax forms correctly and on time.
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*Available in most states. After the 30-day trial period, benefits to the Business Legal Plan (also Business Advantage Pro) continue automatically for $29.99 per month. For states where Business Advantage Pro is not available, benefits to Business Advantage Standard continue automatically for $7.99. You can cancel by calling (877) 818-8787. For full details, see the Legal Plan Contract and Advantage Terms of Service.