Starting Small: The Benefits and Risks of Sole Proprietorships
This lesson is an article published on sbtdc.org.
Read the articleWhat you'll get
The director of the SBTDC's Business Launch Program explains that taking payment under your own name already makes you a sole proprietor, with no state filing, and that this is a fair way to test an idea. He says to form an LLC or corporation as your risk grows, such as when you hire, sign larger contracts or sell food, because switching later means a new EIN, bank account and contracts.
Do this week
Write down the event that will make you form an entity, such as your first sale, contract or hire. If you have a cofounder, make it sooner: two people in business together without one are a general partnership, and each is personally liable for its debts.