If you want to begin your own business and learn more about how to become a sole proprietor, you have come to the right place. Book a call to speak to us here: https://mollaeilaw.com/start to get the legal backing and support you need.
Before you make that call, however, the following tips will give you a better idea about how to succeed as a sole proprietor and start making money on your own.
I Want to Know How to Become a Sole Proprietor – What Do I Need to Start?
If you want to know how to become a sole proprietor and do so successfully, you will need to learn the basics of setting up this type of business. While getting started is easy, you still need to obtain support from a trusted and knowledgeable legal advisor. That is why you need to obtain guidance along these lines.
Book a call to speak to us here: https://mollaeilaw.com/start with specific questions after you read the following suggestions.
You can begin earning money and corresponding with clients from day one as a sole proprietor. In fact, you don’t need to secure an Employer Identification Number (EIN) right away, as you can use your personal social security number (SSN). However, if you are basing your business in the US and are working in this capacity, you will need to obtain an International Taxpayer Identification Number (ITIN).
You need an SSN or ITIN to obtain an EIN. An EIN enables you to open a business bank account and to pay any hired employees. The SSN or ITIN are needed when reporting your business’s taxes.
Sole proprietors can pay their business taxes using their personal income tax return. Therefore, their business earnings are reported as personal earnings annually. If you want to add credibility to your business you should see about getting a “doing business as” (DBA) designation to register your name. This process can go quickly, once you have the required information.
First, you will need to find out, through the Secretary of State’s office where you do business, if the name is available. You should have two or three names in mind.
You can start working immediately, without registering a business name, if you plan to use your first name and surname. Otherwise, you will need to register your sole proprietorship as a DBA. Legal and accounting professionals believe a sole proprietor realizes a number of advantages when establishing a DBA, namely the following:
- Your business will enjoy a more credible standing in the business community. This is especially advantageous for general partnerships and sole proprietorships.
- Many US banks require sole proprietorships to register their business as a DBA before opening a checking account.
- The DBA can assist your sole proprietorship in any efforts toward branding, thus helping your business grow and expand.
- By using a DBA, you can efficiently oversee several branding campaigns, or separate kinds of businesses.
How to Register a DBA Name for Your Sole Proprietorship
To begin the process, you will need to do the following:
- Verify the availability of the name with the Secretary of State’s office.
- Prepare the paperwork required for establishing the name.
- File the paperwork.
- Receive the DBA documentation after paying the appropriate filing fees.
Without a DBA established, you will have a more difficult time opening a business account and will have to represent your sole proprietorship by your personal name. Maybe you work as a writer or editor. If so, you may be able to get by without establishing a DBA or fictitious business name. However, again, it may be helpful to have one if you want to increase your standing in the field or you want to maintain separate business and personal bank accounts.
How to Become a Sole Proprietor after You’ve Decided the reason for Your Business
Naturally, if you want to know how to become a sole proprietor, it is good to have a business in mind. Fortunately, if you are just starting out, you don’t have to meet any formal legal mandates on the federal, state, and local levels. As long as you are working yourself, you automatically become a sole proprietor.
Depending on the type of business, you may need to register as a DBA and obtain certain licenses. You should also write a business plan. The plan will help you decide on what to do to help your company expand. Think of a business plan as a type of road map for your business – a map that will allow you to get the start-up capital you need and decide on promotions and marketing.
Choosing the Name
Probably the choice of a name is the most important aspect to beginning a sole proprietorship. You should also choose a domain name for your website. It should be the same name as the business name. Register the site and register your DBA, as described above. You also want to trademark your name to protect it. Book a call to speak to us here: https://mollaeilaw.com/start. We can help you with trademarking your name. If you want to make your name a brand, it is particularly important to have it trademarked.
What Happens Next
If you are interested in setting up your business now and want to know how to become a sole proprietor, you can make it happen. Book a call to speak to us here: https://mollaeilaw.com/start. We are here to make your dreams of starting a business come true. If, after a while, you find that you may benefit from switching to a limited liability company (LLC), we can support your efforts at that time too.
If you want to start a business and launch it now, there is nothing stopping you from doing so. You can work under a d/b/a name and pay for business liability insurance for added protection. Switching to an LLC later will add to your professional standing and allow you to expand your business more easily. However, if you are just beginning a biz, you can start a sole proprietorship and set yourself up as a single-member LLC (SMLLC) at a later date.
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