Business Sole Proprietorship

A sole proprietorship is the simplest form of business. The prevalent characteristic of a sole proprietorship is that the owner is inseparable from the business. It is not a separate entity. Because they are the same entity, the owner of a sole proprietorship has complete control over the business and its operations, and is financially and legally responsible for all debts and legal actions against the business. Another facet of the “same entity” aspect is that taxes on a sole proprietorship are determined at the personal income tax rate of the owner. In other words, a sole proprietorship does not pay taxes separately from the owner.

A sole proprietor may do business with a trade name other than his or her legal name. Sometimes a sole proprietor is required to file a fictitious business name statement with a local government even if it is the same as his actual name for certain types of businesses or as a requirement to open a business banking account. Once your business is established, you must also get the necessary licenses and/or permits.

woman standing in front of business door holding sign that says open

A sole proprietorship is a good business organization for an individual starting a business that will remain small, does not have great exposure to liability, and does not justify the expenses of incorporating and ongoing corporate formalities.

Points to Consider with a Sole Proprietorship

  • Unlimited Personal Liability for Loss: In a sole proprietorship, the owner is personally liable for the company, thus placing his or her entire personal assets and wealth at risk. If an owner is married, that owner puts the community property at risk as well.
  • Management and Control: The owner (sole proprietor) has total management and control over the company. However, the price for total management and control is that the owner is at risk for personal liability incurred through the acts of the owner’s agents or employees.
  • No Formalities: With the exception of complying with any applicable licensing requirements, there are no formalities required of a sole proprietorship. Note, however, where the business is conducted under a name which does not show the owner’s surname or implies the existence of other owners, California requires that the owner file a fictitious business name statement and publish notice.
  • Transferability: The owner can sell the business as he or she pleases.
  • Duration: The sole proprietorship remains in existence for as long as the owner is willing or able to stay in business.

Get help with your California sole proprietorship today!

A People’s Choice can save you hundreds of dollars by preparing your sole proprietorship documents instead of an expensive attorney!

GET STARTED!
Business Services We OfferPrice
General Corporation Includes standard minutes, bylaws, resolutions, stock certificates and corporate folder. Secretary of State fee: $100.00$275
S-Corporation (Includes S-Corp election) Includes standard minutes, bylaws, resolutions, stock certificates and corporate folder. Secretary of State fee: $100.00$310
LLC Includes Operating Agreement and corporate folder. Secretary of State fee: $70.00$399
Non Profit Corporation Includes standard minutes, bylaws and corporate folder. Secretary of State Fee: $30.00$499
501(C)(3) Non Profit Federal Tax Application$599
Dissolve Corporation$200
Walk Through Service with Secretary of State (turn around time 7-10 days)$165
Registered Agent for Service (Annual)$175
IRS S-Corp Election only$50
Obtain Tax ID Number$50
Statement of Information$50
Fictitious Business Name Includes facilitating processing and publication (filing fee and publication fees vary from county to county).$175
Basic Partnership Agreement$300
Business Sales Agreement$300
Other Business ServicesCall for Quote