Many small businesses begin as Sole Proprietorships: One person, working for him- or herself, without registering at the state level. Here are a few key facts you should be aware of as a sole proprietor:
- State registration is not required. However, most businesses must register at the local level (in the county or city where your business is located).
- Personal social security numbers may be used to open a bank account or file federal tax returns with reference the company.
- A separate Employer Identification Number, or EIN must be obtained if employees are hired.
- Sole proprietors are personally liable for everything the company does, including the actions of employees. This puts at risk entire personal savings and privately owned assets such as a house or car. Check with your insurance agent to be certain they are willing to cover the acts of your employees in your personal liability or umbrella policy.
The Argent Place Solution
- Filings for the local licenses and Employer Identification Number (EIN).
- Create and protect internal processes that form the basis of your competitive advantage (your Intellectual Property).
- Draft and review the various kinds of contracts you will sign or create, including lease for space, contracts with vendors, a template contract for customers, letter offers of employment to prospective employees, and contracts with key employees.
- Convert to LLC or corporate status when the entrepreneur is ready to do so.
After consulting with Argent Place Law about doing business as a sole proprietor you can expect:
- Careful consideration of the pros and cons of operating as a sole proprietor for your specific needs
- Accurate and timely filings of your necessary licenses
- Complete contracts and processes allowing for optimal business operation.
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