What You Need to Do to Start a Sole Proprietorship

Are you beginning your journey as a sole proprietor? Before you jump into networking and your first contracts, you’ll want to ensure you are legally operational and have the appropriate legal protections for your business and brand. As such, your process towards your “grand opening” is a bit different from that of a corporation or LLC. Use this checklist to help you get started with your sole proprietorship.

1. Decide whether to use your own name: Sole proprietors frequently do business using their personal name and details. However, depending on the types of services you intend to offer, it may be better to offer yourself the protections of operating under a fictional business name. Additionally, think about whether you intend to stay a sole proprietorship or eventually transition into a business with employees. If you want to expand your services in the future, your brand will benefit from early establishment. When the time comes to incorporate or move into another business structure, you will already have an established and trademarked name to take with you.

2. Choose a business name: If you decide to do business under a fictional name, you will naturally want to pick something catchy that accurately encompasses the scope of your business. For example, if you are a freelance graphic designer, you may want to include an allusion to the design process. Keep your name simple, but stay away from overly generic words and terms, as they may be difficult to trademark later. Don’t pick a name that overly restricts your services, especially if there is a chance for expansion in the future of your enterprise. If you might expand across state or regional lines, don’t include a specific location in your name.

3. Determine name availability: When you are choosing your name, you may want to come up with a ranked list of possible enterprise names. Until you perform a search of trademarked names, you can’t be sure that your business name is available for use and trademark registration. While you can start your search with a simple search engine query, you will also have to search federal and local databases for registered trademarks identical or confusingly similar to yours. Additionally, you should also search for unregistered trademarks. At this point in the process, it may be best to seek professional guidance from an attorney.

4. Register your name: To register your fictitious name, you’ll need to follow the standard procedures of your local Secretary of State’s office. You may be required to register your name down to the county level depending on your operating location. Most registrations for fictitious names can be completed on your local state government’s website. Some states require you to officially publish the name of your business through a local newspaper. You may also wish to register for further trademark protections through the federal, local and state governments.

5. Obtain your business licenses: Depending on how and where you intend to do business, you’ll need to get a business license on the federal, state and local level. Typically, the requirements for these registrations overlap, but each may have a unique element here and there. Ultimately, you’ll need to apply for any licenses or certifications necessary to legally offer your services. You may be required to obtain an employee identification number or establish your sole proprietorship through official means. If you plan to have an office or operating location, you may be required to obtain zoning, building, environmental or health permits. To understand what regulations apply to your enterprise, make sure to review those related to your services and products. Sole proprietors are a unique type of business professional as they are both a citizen and an enterprise. If you have any questions, consider speaking with an attorney for guidance.

Legal Disclaimer

The content on our website is only meant to provide general information and is not legal advice. We make our best efforts to make sure the information is accurate, but we cannot guarantee it. Do not rely on the content as legal advice. For assistance with legal problems or for a legal inquiry please contact you attorney.