Frequently Asked Questions

What are the requirements and ongoing maintenance for a sole proprietorship?

Setting up a sole proprietorship is relatively straightforward due to minimal government regulation. This type of business can operate under the owner's name or a separate business name, such as a Doing Business As (DBA). However, it's important to note that the business name does not separate the owner from the company, meaning the owner is personally liable for any outstanding debts. In terms of ongoing maintenance, if the owner decides to cease operations, they can either sell the business or stop doing business altogether. However, any outstanding debts must be repaid before ceasing business. The owner also has the option to pass the business down to their heirs. There are no tax filing or associated fee requirements for a sole proprietorship. However, owners must comply with applicable licensing and permit requirements in the state in which they are doing business, as well as local regulations and zoning ordinances. If the sole proprietor intends to sue another party, they can do so in their own name. Conversely, if another party sues the company, the legal suit will be brought against the individual owner, not the company.