Sole Proprietorship in Kansas

By Jeff Franco J.D./M.A./M.B.A.

When you’re the sole owner of a business in Kansas and don’t create a legal entity for it, state law designates it as a sole proprietorship. This means that Kansas doesn’t distinguish between your personal and business activities: they are one in the same. However, if you’re in the process of starting a Kansas business, you should consider all advantages, as well as disadvantages, of operating as a sole proprietorship.

Forming Sole Proprietorship

As soon as you come up with a good business idea and are ready to get operations underway, choosing to operate as a sole proprietor allows you to start the business immediately. This is because Kansas doesn’t impose any state filing or registration requirements on sole proprietors. However, one significant disadvantage is that you’re personally liable for all debts, contractual obligations, or lawsuits associated with the business. Further, business loans are based on your own credit worthiness.

Kansas Business Names

Unlike many other states that require sole proprietors to register their trade names, Kansas lets you use any business name you want and doesn’t impose formal registration procedures or make you check to see if another business already has the same name. In contrast, other business entities in Kansas, such as corporations, must provide a unique name at the time of incorporation. However, if you feel that your trade name is an invaluable asset to your business, you may want to consider obtaining a trademark with the United States Patent and Trademark Office. By obtaining a trademark, you then have the option of registering it with the Kansas Secretary of State, which prevents other Kansas businesses from using the name.

Ready to start your LLC? Start an LLC Online Now

Kansas Permits and Licenses

Just because you don’t create a legal entity for your business, it doesn’t mean that you are exempt from state regulations that require businesses to obtain a permit or license before engaging in certain activities. For example, sole proprietors who sell goods in Kansas need to apply for a sales tax certificate with the Kansas Department of Revenue. Further, if you operate a liquor store, you’ll need to apply for a Kansas retail liquor license.

Kansas and Federal Taxes

As a sole proprietor, you still have to pay state and federal income taxes on your business earnings, but you report your business income on your personal tax returns. You may take business losses as a personal income tax deduction to offset income from other sources. All profits are taxed at your personal income tax rate. Kansas requires that you report your sole proprietorship earnings on Form K-40, while the IRS requires that you report your business income on a Schedule C or C-EZ attachment to your 1040 form on or before the 15th day of the fourth month following the close of the taxable year. For both federal and Kansas income tax purposes, you need to be aware of your obligation to make periodic estimated tax payments throughout the year since you aren’t subject to withholding like employees are. Moreover, you also have an obligation to pay self-employment taxes, which you calculate on Schedule SE and attach to your federal return.

Ready to start your LLC? Start an LLC Online Now
Forms and Fees for Registering a Sole Proprietorship in Mississippi


Related articles

Do I Need an LLC or a Business License?

One of the first decisions you must make when you decide to go into business is the choice of a legal structure for your enterprise. Many small business owners opt for a limited liability company, or LLC. Other would-be entrepreneurs discover that they must obtain a business license from a municipality, state or the federal government. Depending on your location and the nature of your business, you may decide to form an LLC in addition to obtaining a business license.

How to Create a Sole Proprietorship in South Carolina

If you are starting a business in South Carolina and want to operate it as a sole proprietorship, it isn’t necessary to file any formation documents with the Secretary of State to create it. In fact, you can begin operating your business at any time. However, despite the fact that South Carolina doesn’t impose formal requirements to create a sole proprietorship, there are other state requirements you must comply with.

Alabama Sole Proprietorship Rules

A sole proprietorship is a common business structure because it is simple to set up and has few filing and tax requirements. As a sole proprietor, you are the sole owner and are personally responsible for the debts of the business. There are no registration requirements for starting an Alabama sole proprietorship, and you are not responsible for business tax. However, you may have additional filing and tax requirements depending on the type of business.

LLCs, Corporations, Patents, Attorney Help LLCs

Related articles

Sole Proprietorship Laws in Illinois

For individuals looking to start a business without partners, a sole proprietorship is a common business entity because ...

How do I Get an Illinois State ID Number for an LLC Company?

Illinois law governs the formation and acts of businesses registered in Illinois, including limited liability ...

Sole Proprietorship Registration in Arkansas

If you plan on starting a business in Arkansas, choosing to operate as a sole proprietorship is the quickest way to get ...

How Can I Open a Sole Proprietorship in Nevada?

Opening your sole proprietorship in Nevada requires obtaining the appropriate business license from the state. ...

Browse by category
Ready to Begin? GET STARTED