A sole proprietorship functions as an alter ego of its owner. State law requires you to operate the business under your own name, so the public knows who to hold responsible for business activity. For example, a personal trainer named John Smith must have his customers pay him by writing a check to “John Smith.” He cannot call his sole proprietorship “In Shape Personal Training” and operate under that name unless he registers the name with the state as a fictitious business name, also known as a “doing business as” (DBA). Most states process DBAs at the county level, so the name registration is only good in that one county. A few states, like Florida, process DBAs at the statewide level, which entitles the owner to use the name anywhere in the state.
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Check the availability of the business name you want to use. Go to the website for the secretary of state for the state where your business is located or other state agency website that handles business registrations. All states maintain a database of business names that are tied to active businesses operating within the state. Follow the links to access the state's business entity database. Search the database to ensure the name you want to use is not already in use by another entity. State law requires every business operating in the state to use a unique business name. This database search is not definitive but it is a good indicator of availability. The state will conduct a definitive search when it processes your application to use the name.
Submit an application to reserve a fictitious business name or DBA. Ninety-five percent of the states require you to file your DBA with the clerk of the county where your business is located. A handful of states, such as Florida, accept DBA registrations through the same state office that accepts corporation filings, which is typically the secretary of state's office. Go to the county clerk's website. Follow the links in the business section to download a registration form or submit a business name registration online. Each state assesses a fee for processing the registration. If your county clerk does not process DBAs, go to the secretary of state's website and process your application from there.
Apply for a state business license, if necessary. Most states do not require a sole proprietorship to register with the state or obtain a license to operate. A handful of states, such as Nevada, do require sole proprietors to obtain a state business license. Go to the business registration section of the secretary of state's website. Download an application for a business license or submit the application through the state's electronic filing system, if available. There is typically a fee associated with this license.
Obtain any required state occupational licenses or permits, if needed. Certain types of businesses are regulated at the state and local level, such as dentists and physical therapists. You must apply for a license to operate through the state board for your particular occupation. Each state maintains a list of the occupations that it regulates; the list is typically available by visiting the website for the state department of economic development or other state agency that promotes business opportunities in the state. There is usually a fee associated with this type of license.
Apply for local business licenses or permits. Certain localities, such as the city of Las Vegas, require all businesses to obtain a city business license. Go to the main website for the city and access the business registration section. Download an application and submit it by mail or file the application electronically. Certain localities also require permits for particular types of business activities, such as operating a food service catering business from the home. Check with you local regulations to determine if you need to apply for any relevant permits.
Register with the state department of taxation if you plan to hire employees or sell products that require you to charge sales tax. Go to the website for the state tax agency. Download a state tax registration form and mail it in or complete the registration online, if available.
Apply for an employer identification number from the Internal Revenue Service, if you plan to open a bank account under the DBA. Go to the IRS website. Access the online EIN application. Fill out the requested information. The system assigns you a number as soon as you submit the form. Alternatively, download IRS Form SS-4 and mail or fax it in.
Tips & Warnings
References & Resources
- Citizen Media Law Project: Becoming a Sole Proprietor
- Internal Revenue Service: Sole Proprietorships
- SBA.gov: Register Your Fictitious or Doing Business As (DBA) Name
- Citizen Media Law Project: Choosing and Checking the Availability of a Business Name
- FindLaw: Checklist -- Starting a Sole Proprietorship
- Internal Revenue Service: Apply for an Employer Identification Number (EIN) Online
- SBA.gov: Starting & Managing a Business
- FindLaw: Forming and Operating a Small Business
- The 'Lectric Law Library's Business & General Legal Forms