What is a “sole proprietorship”
A sole proprietorship, also known as the sole trader or simply a proprietorship, is a type of business entity that is owned and run by one natural person and in which there is no legal distinction between the owner and the business.
How do you set up a sole proprietorship?
1) Obtain an Employer Identification Number (http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Apply-for-an-Employer-Identification-Number-%28EIN%29-Online) or choose to use your social security number when reporting taxes;
2) Choose a business name (If using a DBA, or a fictitious name, you must fill out an assumed name certificate from the county clerk’s office); and
3) Obtain all necessary licenses, permits and insurance requirements.
Does any “legal” paperwork need to be filed?
No. Sole proprietorships are the easiest of the business entities to form for this very reason.