What Is the Ease of Formation for a Sole Proprietorship?

When you have no partners, the default status for a business is a sole proprietorship. 1. You can either use your own name for your business. If you want a different name, check with your county clerk to make sure there is no business under the same name. 2. The United States Internal Revenue Service (IRS) will consider you and a sole proprietorship the same when it comes to taxes. Any taxes you make in your business will need to be filed in your tax return.. 3. You may choose to file an LLC (Limited Liability Company) for your sole proprietorship to protect your personal assets from your business debts and any court actions that may come to your business. The IRS will still consider your business a sole proprietorship. 4. Because the IRS still considers your sole proprietorship the same as you, you do not need an Employer Identification Number (EIN). You can just use your social security number as your tax ID. 5. A bank my require you to have an EIN to open a business account. This can be obtained for free at the IRS website.