If you’re wondering about the best business structure for your new company, side business or freelancing gigs, know that your choice in legal structure can have a significant impact on your business, determining everything from how you pay taxes, to how much paperwork you’ve got to contend with, to what happens if you get sued.
The sole proprietorship is the simplest way to operate a business. If you’re self-employed or conducting any kind of business and haven’t picked a formal business structure, then by default, you’re operating as a sole proprietor. This business structure has advantages and disadvantages, depending on your specific set of circumstances. Here’s what you need to know:
The biggest advantage of the sole proprietorship is that it’s simple to form and manage. All you need to do to run a business as a sole proprietor is to register the business name via a DBA — if you will be using a business name that’s different than your own name — and get any required local business licenses. If you’re running a consulting business under your own name, you don’t need to register the name. However, if you’ll be using a different name (like Joe’s Consulting), then you’ll need to file a DBA (Doing Business As ) with your state to use the name Joe’s Consulting. Continue reading “The Pros and Cons of Sole Proprietorship” »