File Sole Proprietorship and DBA
What is a Sole Proprietorship?
A sole proprietorship is an entity type used to register a business name. They are typically registered with the county clerk's office.
What are the characteristics of a sole proprietorship?
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A sole proprietorship is registered exclusively to a single owner
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It is the simplest way of doing business; no annual reports are required to maintain it
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A business owner is personally liable for any lawsuits and sole proprietorship does not grant any legal protection to personal assets, unlike corporations and limited liability companies
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Some states require to meet the publication requirement to register a sole proprietorship. Most states do not release the business certificate until the evidence of the publication is not submitted
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An identifier such as Inc. or LLC is not allowed as a suffix on the business title because sole proprietorship files under the business owner's legal name
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Multiple persons can use the same name in the same state if they operate / reside in different counties
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The Employer Identification Number is not required for a sole proprietorship to open a bank account. It is only required to hire an employee
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A business owner cannot draw a payroll and pay social security taxes on the entire income. Cap is applicable
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The title is generally good for five to ten years, depending on the state
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A third party registered agent service cannot be used to create a sole proprietorship
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A Non US Resident is not eligible to apply for a sole proprietorship registration
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A sole proprietorship business name appears in the county database instead of the state database in most states because it is registered on a county level
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A sole proprietorship cannot convert from one structure to another and from one state to another state unlike the corporations or a limited liability company