Sole Proprietorship is an easy and quick way to start a business with only one owner and decision maker. However, unlike Corporations or LLCs, the owner is not shielded from personal liability.
What is a Sole Proprietorship?
A Sole Proprietorship is an unincorporated business owned by one individual who is solely responsible for liabilities and pays personal income tax on all the profits. A sole proprietorship is easier to manage than a Corporation or a Limited Liability Company (LLC), however, it is not a separate legal entity that shields the owner from debts and liabilities. The owner of the business is personally responsible for everything.
Owner’s Name vs. Fictitious Name
A sole proprietorship can be operated under the owner’s name (i.e. Roger Doumanian, Attorney at Law), or under a fictitious name (i.e. XYZ Legal Services). If under the owner’s name, no filing is needed, however, if under a fictitious name, the owner has to file a DBA or “Doing Business As” with the County Registrar-Recorder’s Office.
The Downside of Sole Proprietorship
As a Sole Proprietor, you are personally responsible for ALL of your business liabilities and debts. That means your finances, savings, and assets, including your house, cars, and kid’s college funds are all on the line. In addition, if you die, the business dies with you because there is no one left to run it. Finally, it is more difficult to raise funds or working capital from potential investors because you have no shares or membership interest to give away like you do with a Corporation or an LLC.
Legal Services for Sole Proprietorship
I have helped many sole proprietors protect their business and personal assets through legal advice, contract writing, and intellectual property matters. I also provide business formation services for those who wish to transition from a Sole Proprietorship to a Corporation or an LLC. Below is a partial list of the legal services I provide to sole proprietors:
Agreements (Review, Drafting, and Negotiations)
- Service Agreements
- Confidentiality Agreements
- Trade Secret Agreements
- Licensing Agreements
- Commercial Leases
- Employee Agreements
- Employee Handbooks
Don’t see the Sole Proprietorship legal service you are looking for listed above? Give me a call today and let’s discuss your specific legal needs.
Please remember that I don't give legal advice over the phone or via email. The information you obtain on this site is not, nor is it intended to be legal advice. Please visit the Disclaimers page to learn more.