Wednesday, December 30, 2009

What is a sole proprietorship?

A sole proprietorship is the common and form of business. Most small businesses begin as sole proprietorship, and many family-run businesses continue to use this form. In a sole proprietorship, a single individual engages in a business activity. There is no formal paperwork required by the state of Texas in order to start or form a sole proprietorship.

If the business is conducted under a name other than the surname of the individual, then an assumed name certificate (or "DBA" for doing business as) should be filed with the County Clerk's office where the business is located. If there is no formal location for the business, then an assumed name certificate should be filed with the county clerks in all counties where business is conducted.

One drawback of the sole proprietorship is that the business owner has liability for all of the debts of the business and any other claims against the business, such as tort liability.

Typically, a sole proprietorship will use the social security number of the individual owner and will pay taxes using Schedule C attached to the owner's 1040 tax form.

If you need a Texas business lawyer, please contact Peterson Law Group.

No comments: