registering a sole propreitorship

**1off** · 01-31-2008 02:18 PM

hi i wanted to know, what do i need to do, do i only apply for the permits and file a DBA or is there more?

**BusinessAdviser** · 01-31-2008 03:26 PM

Originally Posted by 1off

hi i wanted to know, what do i need to do, do i only apply for the permits and file a DBA or is there more?

Why in the world did you decide to operate as a sole proprietor?!

**pboychuk** · 01-31-2008 05:55 PM

Originally Posted by jmenq2

Why in the world did you decide to operate as a sole proprietor?!

why not????????????

**JLeezer** · 01-31-2008 06:26 PM

Originally Posted by jmenq2

Why in the world did you decide to operate as a sole proprietor?!

That's a bit premature of a question.

Let me preface my response with: I'd highly investigate whether the need for another corporate entity is necessary before pursuing using a sole proprietorship model.

That being said, in most states all that is necessary to conduct business as a sole proprietor is to receive the necessary permits and file a DBA (assuming your last name will not appear in the business' name; if it does, then you may not have to file a DBA at all...check with your state).

BTW, pboy, I was working on a response to your PM about holding companies from my computer at work and forgot to send myself what I had written. Expect a fairly lengthy response in your PM sometime early tomorrow.

**BusinessAdviser** · 01-31-2008 07:04 PM

Originally Posted by pboychuk

why not????????????

A sole proprietor faces unlimited liability and is personally responsible for all debts of the business. These alone are enough to convince me to operate under a different business entity, but I can go on if you'd like.

**BusinessAdviser** · 01-31-2008 07:08 PM

Originally Posted by JLeezer

That's a bit premature of a question.

Let me preface my response with: I'd highly investigate whether the need for another corporate entity is necessary before pursuing using a sole proprietorship model.

That being said, in most states all that is necessary to conduct business as a sole proprietor is to receive the necessary permits and file a DBA (assuming your last name will not appear in the business' name; if it does, then you may not have to file a DBA at all...check with your state).

BTW, pboy, I was working on a response to your PM about holding companies from my computer at work and forgot to send myself what I had written. Expect a fairly lengthy response in your PM sometime early tomorrow.

Why is it a bit premature? Can you think of an advantage to operating as a sole proprietor rather than, say, an LLC?

To create an LLC, all you have to do is file Articles of Organization and obtain necessary permits, right? Not a whole lot more difficult that a sole proprietorship but with HUGE advantages over it, wouldn't you say?

Correct me if you think that I am wrong. I would definitely like to know of any real advantages of a sole proprietorship over an LLC, as I am presently unaware of any.

**pboychuk** · 01-31-2008 09:31 PM

Originally Posted by jmenq2

A sole proprietor faces unlimited liability and is personally responsible for all debts of the business. These alone are enough to convince me to operate under a different business entity, but I can go on if you'd like.

Fair enough, I just registered an LLC, and I can honestly say it was much easier than registering a sole proprietorship which is what I had been in the past. However, I still have much to learn.

**pboychuk** · 01-31-2008 09:41 PM

Originally Posted by JLeezer

That's a bit premature of a question.

Let me preface my response with: I'd highly investigate whether the need for another corporate entity is necessary before pursuing using a sole proprietorship model.

That being said, in most states all that is necessary to conduct business as a sole proprietor is to receive the necessary permits and file a DBA (assuming your last name will not appear in the business' name; if it does, then you may not have to file a DBA at all...check with your state).

BTW, pboy, I was working on a response to your PM about holding companies from my computer at work and forgot to send myself what I had written. Expect a fairly lengthy response in your PM sometime early tomorrow.

Wow, I appreciate the time you have set aside to answer my questions. I know there is a lot to learn, and I do not want to hire an account or attorney just yet, so your support has been very helpful in pushing me along as I try to grow. I will be on tomorrow to check for your reply.

Thanks Again,
Peter

**BusinessAdviser** · 01-31-2008 09:45 PM

Originally Posted by pboychuk

Fair enough, I just registered an LLC, and I can honestly say it was much easier than registering a sole proprietorship which is what I had been in the past. However, I still have much to learn.

You're off to a fine start then. This is just my personal opinion, so not legal advice obviously, but I would never EVER operate a business as a sole proprietorship. There's just too much to be lost by doing so. And although sole proprietorships and partnerships are more flexible than corporations, LLCs afford the same flexibility while still offering the limited liability of corporations. I just have yet to find a good reason for operating as a sole proprietorship or partnership rather than as an LLC. Thanks for your insight!

**pboychuk** · 01-31-2008 09:51 PM

Originally Posted by jmenq2

You're off to a fine start then. This is just my personal opinion, so not legal advice obviously, but I would never EVER operate a business as a sole proprietorship. There's just too much to be lost by doing so. And although sole proprietorships and partnerships are more flexible than corporations, LLCs afford the same flexibility while still offering the limited liability of corporations. I just have yet to find a good reason for operating as a sole proprietorship or partnership rather than as an LLC. Thanks for your insight!

I was 16 when I registered my SP, lets just say I didnt know anything about anything...

**JLeezer** · 01-31-2008 11:31 PM

Originally Posted by jmenq2

Why is it a bit premature? Can you think of an advantage to operating as a sole proprietor rather than, say, an LLC?

To create an LLC, all you have to do is file Articles of Organization and obtain necessary permits, right? Not a whole lot more difficult that a sole proprietorship but with HUGE advantages over it, wouldn't you say?

Correct me if you think that I am wrong. I would definitely like to know of any real advantages of a sole proprietorship over an LLC, as I am presently unaware of any.

I absolutely agree that LLCs and Corps are the way to go probably 99.99% of the time. But occasionally, they just aren't necessary. My brain is refusing to think of good ideas at the moment, but I know I had one in mind earlier when I wrote my first note. I'll think of them in the morning...promise.

Anyway, I vote LLC or Corp most of the time, but whatever is chosen, make sure it is the correct choice for the situation.

**BusinessAdviser** · 02-01-2008 12:03 AM

Originally Posted by JLeezer

I absolutely agree that LLCs and Corps are the way to go probably 99.99% of the time. But occasionally, they just aren't necessary. My brain is refusing to think of good ideas at the moment, but I know I had one in mind earlier when I wrote my first note. I'll think of them in the morning...promise.

Anyway, I vote LLC or Corp most of the time, but whatever is chosen, make sure it is the correct choice for the situation.

When you recall the situation that you had in mind earlier, please do tell. I'm still anxious to hear of a situation in which a sole proprietorship or partnership would be more advantageous than an LLC.

**pboychuk** · 02-01-2008 08:25 AM

Originally Posted by jmenq2

When you recall the situation that you had in mind earlier, please do tell. I'm still anxious to hear of a situation in which a sole proprietorship or partnership would be more advantageous than an LLC.

I may be wrong, but I think a good situation may be when you are running a very small business and just searching for licensing, for example, selling consignment on ebay. You want to stay legal, but dont want to deal with all the taxes etc. involved with llc/corp.

**1off** · 02-01-2008 02:49 PM

i know the owner is liable for everything but its cheaper when you just starting out.

Get this is it me or there are no permits for people who are trying to start a clothing line.

**BusinessAdviser** · 02-01-2008 02:58 PM

For less than $100 and in less than 5 minutes you can create an LLC. Does the "it's less expensive and easier to operate as a sole proprietorship" argument win me over when the downside is unlimited liability? The answer is no. It's just too inexpensive and easy for me to create an LLC to justify not doing so and leaving myself open to unlimited liability. Again, this is just my opinion though.