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Start a Sole Proprietorship

Get the quickest corporate formation possible online along with worry-free support to launch your business.

Small businesses that operate on a sole proprietorship basis are most prevalent. They are simple to use and do not require the same specific filing requirements as more complicated business structures.

A sole proprietorship is the simplest and most common structure for a new firm. There is no separation between the business and the owner in this unincorporated business conducted by a single person. The owner of a sole proprietorship is responsible for all debts, losses, and liabilities incurred by the business and is entitled to all profits.

Despite their name, sole proprietorships are permitted to hire employees so long as they obtain an EIN. Profits from a sole proprietorship are taxed as the owner’s personal income (Employee Identification Number). They need the least amount of effort to set up. They are therefore the most well-liked.

A sole proprietorship is not a distinct legal entity from its owner, in contrast to an LLC (limited liability company) or a corporation. On the other hand, many sole proprietors later transform their businesses into limited liability companies (LLCs) when they’re ready to grow.

Types of Sole Proprietorship Business

  • Franchisee : Another form of franchise owner is a lone entrepreneur. The franchisee has access to the brand, business model, and other resources in exchange for royalties paid to the franchisor.
  • Independent Contractor : An independent contractor is a self-employed sole proprietor who completes assignments for clients under contract. Even if they have the freedom to choose which clients they deal with, they are frequently constrained by the policies and requirements established by the client.
  • Business Owner : Business owners, like contractors, are self-employed sole proprietors, but unlike them, they have far greater control over the work that is done for clients, and their operations may even be more complex in terms of staff and/or intellectual property.

How to Start a Sole Proprietorship Business in the USA?

The detailed instructions on “How to Start a Sole Proprietorship Business in the USA?” are provided below.

  • Choose Business Name

  • Get License and Permission from the government authorities

  • Get EIN (Employer Identification Number)

  • Open your Business Bank Account

Advantages of Setting up a Sole Proprietorship Business in the USA

  • One of the main advantages of a sole proprietorship is that it makes it possible to grow your firm much more swiftly and with less burdensome paperwork from the government.
  • You don’t have to worry about some of the other components of an LLC or corporation, like company officers or registered agents, if you run a sole proprietorship.
  • One of the biggest advantages of running a business as a sole proprietor is the ability to save money on registration fees.


The fees for registering a sole proprietorship vary depending on the state, but on average it ranges from $50 to $200, but additional expenses like business licence and other local fees may be levied.

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