Do You Run A Business? Do You Know What Is A Sole Proprietorship?
When you don’t register your business with the Secretary of State, your default status is a “Sole Proprietorship”. You do not need to register your business to operate as a Sole Proprietor. Additionally, if you want to operate your business under a name other than your own, you can always file a “Doing Business As” (DBA), which is also known as a Fictitious Name. Once filed with the proper municipal agencies, the documents can be used to open a bank account under that name. Also, don’t forget to pay your state and federal tax obligations (quarterly)!
Do you need help in setting up a business? Or, are you confused if a Sole Proprietor is good for you? Corporation? Limited Liability Company (LLC)?
When beginning a business, you must decide what form of business entity is best for your venture. There are situations where a Sole Proprietor is a good selection – perhaps when just starting out conducting business. Your form of business determines which income tax return form you have to file – sole proprietorships pass through to the personal tax return.
The most common forms of business are the sole proprietorship, partnership, corporation, and S corporation. A Limited Liability Company (LLC) is a business structure allowed by state statute – and is generally the most popular business formation. However, it is important to note that both legal and tax considerations enter into selecting the best business structure for your venture. The following is a list of possible business entity forms:
- Sole Proprietorships
- S Corporations
- Limited Liability Company (LLC)
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