A sole proprietorship is the default choice for anyone who runs a business but hasn’t set up another formal business structure like an LLC. As a sole proprietor, there’s no separation between your personal and business assets and expenses. You are personally responsible for all your business’s debts and obligations.

Is a sole proprietorship the right choice for You?

A sole proprietorship is the default choice for anyone who runs a business but hasn’t set up another formal business structure like an LLC. As a sole proprietor, there’s no separation between your personal and business assets and expenses. You are personally responsible for all your business’s debts and obligations.

Is a sole proprietor a form of business?

If you are doing business by yourself without any form of corporation or structure, you are considered a sole proprietor. Your profits are taxed as part of your individual income taxes. There’s no official business structure.

Can a sole proprietor have a DBA for marketing?

For example, let’s say you’re a sole proprietor named Joseph Johnson that provides marketing consulting services. You could register a DBA called “JJ Marketing Associates” to avoid using your name for business purposes, marketing purposes, or as the public-facing name of the company.

What is the difference between a sole proprietorship and an LLC?

Sole proprietorships and limited liability companies (LLC) are two of the most common business structures for individuals and small businesses. A sole proprietorship is the simplest and requires minimal paperwork. An LLC requires upfront paperwork and costs but could provide your business long-term benefits that make the investment worth it.

What percentage of businesses are sole proprietorships?

According to the Small Business Administration, roughly 87% of small businesses with no employees are sole proprietorships. Yet among small businesses with employees, that share drops to 14%. The main advantage of sole proprietorship is its stunning simplicity.

What are the liabilities of a single-member LLC?

A single-member LLC is generally shielded from personal liability for debts associated with the business. Note: Single-member LLCs must be careful to avoid commingling business and personal assets. This could lead to what is called piercing the corporate veil and the loss of your limited liability.