Would a Sole Proprietorship Be the Right Structure for You?

A sole proprietorship is pretty easy to set up and it demonstrates that the business is all yours and solely owned by you.  You can use this type of legal entitiy if you have no partners, you expect small income and expenses and you will are selling products aremerchanidse that are not likely to injure anyone or make anyone sick. This is important because a sole proprietorship provides no liability protection to you as the owner, so your personal assets are in jeopardy if you get sued.

I am not a lawyer, but as I understand it,you automatically have a sole proprietorship if you begin transacting business under your own name. Depending on your state (or even your city) there could be a registration form youneed to fill out and possibly a nominal fee necessary to register this way.  If you go with a company name, you usually have to establish that you are doing business as (DBA) a company different from your own name.

A sole proprietorship means you will be responsible for all business decisions so you get all the credit and all the blame for your success or failure. There are risks. For example, if you import and distribute a food product and someone gets sick, (or just says they got sick), after eating it, then they can sue you and they could win and most of your personal assets would be at risk. The profits and the losses of your business will amount to personal income with a sole proprietorship. But, its easy and for some people, the easiness may be worth it.