How to Form a Sole Proprietorship in Ohio

by Elizabeth Rayne
Sole proprietorships are common business formations for independent entrepreneurs.

Sole proprietorships are common business formations for independent entrepreneurs.

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Many Ohio businesses are formed as sole proprietorships because this type of business is relatively simple to set up, and the individual owner maintains complete control over the management and profits of the business. A sole proprietorship may be formed without any official registration with the state, but there may be additional licensing and registration requirements depending on the type of business.

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Formation

Ohio does not require sole proprietorships to register with the state to establish a business. Instead, a sole proprietorship is formed as soon as an individual begins doing business on her own. A sole proprietorship is essentially the alter ego of the business owner, meaning the responsibilities, profits and assets of the business are not distinguishable from the owner. In other words, the owner is personally liable for the debts and obligations of the business. While the business is formed without registration, the state requires certain types of businesses to pursue further licensing and tax registration.

Fictitious Business Name

If you would like to do business under a name other than your own, you must register either a trade name or fictitious name for the sole proprietorship. Before registering any name, you should utilize the business name search tool on the Ohio Secretary of State's website to find out if the name you want to use is available. Once you have selected an available name, you may register the trade name to ensure your business has exclusive use of it. To apply for a trade name, submit an application to the Secretary of State and include your name, selected trade name, address of the business, type of business, and length of time the trade name has been in use. If you want to do business under a different name than your own, but do not want to register a trade name, you are required to file a fictitious name registration with the Secretary of State. Both forms are available on the Secretary of State's website and must be submitted with the appropriate fee.

Tax Registration

If you plan to collect sales tax or hire employees for the sole proprietorship, you must register with the Ohio Department of Taxation. You register your business online on the Ohio Business Gateway Electronic Filing page. You may select the appropriate licenses for your business or answer a series of questions to identify which tax licenses, if any, you should register for.

Licensing

Depending on the type of business, a sole proprietorship may be responsible for professional or occupational licenses from state or local agencies. The state regulates a number of professions and requires certain businesses to be licensed before opening doors to the public. A few of the regulated business include medicine, accounting, security and food preparation. Visit the licensing page of the Ohio Business Gateway website to determine if your business is regulated and whether you should pursue licensing. The state recommends that you contact your town or county clerk to determine if there are additional licensing requirements in your location.