What is a Sole Proprietor?
A Sole Proprietor is an individual who is conducting business under his personal name (and can also be operating their business under a DBA which allows him or her to establish an official company name for the business.) A sole proprietorship is the quickest and easiest way to start a business, is owned and run by one person and is not considered a separate legal entity. When doing business as a sole proprietor there is no legal distinction between the owner and the business, therefore the individual conducting business is personally responsible for all debts and liabilities.
What are the pros and cons to running a business as a Sole Proprietor?
- Lighter Paperwork
- Easier Taxes
- Fast and easy process to form the business
- No annual fees or paperwork required to maintain your business name
- Personal liability
- Not much room for expansion
- The death or illness of the owner results in the end of the business
- It is generally more difficult for sole proprietors to raise operating cash or arrange long term financing because they have fewer assets
- All decision making power rests with one individual
- Sole Proprietorship appears less professional than a corporation or LLC
- You are liable for all risk and liability associated with your business and your personal assets can be at risk if you find yourself in an ugly situation w/the business
What information do I need to register my DBA?
To get started with registering a DBA you need to know:
- The name you’d like to register for your company
- Business address (some sole proprietor’s operate their business under their home address, this is perfectly fine.)