It can be an exciting time when starting a business as a Sole Proprietor. However, the many paperwork tasks can be very complex and much less exciting. The process of registering your business in your state does not have to be confusing when using an online service like Gov Doc Filing for your sole proprietor application. Their experts take the stress off of your shoulders.
What is a Sole Proprietor?
When starting a business as an individual, you do not need to go through the extra stress involved in forming a Corporation or an LLC. You are the Sole Proprietor of the business. The main difference between a Corporation or LLC and a Sole Proprietor is taxation and liability. As a Sole Proprietor, you are a single entity with no addition formation required by the IRS, state, other than a Tax ID/EIN when necessary.
Liability and Taxation as a Sole Proprietor
The owner and the business exist as one with a Sole Proprietor. This means risks of your business applies to your personal assets as well as the businesses. You are entirely liable for your business. As a Sole Proprietor, you may or may not hire employees. However, if you choose to hire an employee for your business, you must apply for an Employer Identification Number or EIN.
Taxes for a Sole Proprietor are reported on your personal income taxes. Taxation for this entity is known as Pass Through Taxation. What this means is that all profits, as well as expenses from your business, are passed on through to your personal tax return rather than a business return.
Quick, Simple and Secure
GovDocFiling.com provides simplified applications for both Employer Identification Numbers and Sole Proprietor registrations. Ensure your business is reported accurately when starting a Sole Proprietor by registering it before you make any money.