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What Is A Sole Proprietorship?
This post is first in a series of three which will explore the differences between a sole proprietorship, an LLC and a corporation.
A sole proprietorship is a way of owning a business where it becomes inseparable from your personal assets. All the responsibilities of finances, loans and liabilities fall directly on the person starting the business. This can cause a problem for potential investors because there is little to no security offered if the business goes under.
On the flip side, a sole proprietorship is the easiest way to get a business up and running. The Georgia Secretary of State offers a helpful document that explains the ins and outs of just what makes a sole proprietorship unique. If you are willing to take the risks of being solely responsible for all the financial navigation of operating a business, the sole proprietorship route may be for you. There are only a few simple steps you should take to get your sole proprietorship set up:
Choose a business name. To make sure the business name you want is not already taken, run a search in the Secretary of State corporation database.
File a trade name. If you want the name of your business to be something other than your own legal name, Georgia requires you to file a trade name. The clerk of the Superior Court in your county can help you file a trade name. The cost of filing varies depending on the county, but is typically around $160. You must also run the name of the company in your local newspaper for two weeks.
Appoint a registered agent. This person agrees to accept legal papers in the event that your business is sued.
After completing these initial steps, you're on your way to making your Sole Proprietorship a business! If you want to hire employees for your business, you must have an Employer Identification Number which you can get through the IRS. Next, you should look into opening a bank account for your business, obtain liability insurance and start keeping track of your taxes.
Starting your own business can be an intimidating experience but also highly rewarding. Make sure you do proper research. Good luck!
About the Author
A Georgia native, Rachael Wheeler works as a Web Support Specialist for GeorgiaGov. She writes about a variety of current topics relevant to the Georgia government.