Steps in Formation of Sole Proprietorship in Wisconsin

By Jim Thomas

As the Wisconsin Bar Association puts it, choosing the form of your business is similar to buying a car. There are a certain number of models you can choose from with their own customized features. A sole proprietorship – a business with one owner who makes the management decisions – is the easiest type of business entity to establish. However, it's important to set up your sole proprietorship correctly, which might mean registering the name of the business and obtaining an Employee Identification Number (EIN) from the Internal Revenue Service for tax purposes.

Creation of Sole Proprietorship

"No legal formalities are required to bring this form of business structure into being, and there are no particular formalities necessary for operation," explains the State of Wisconsin. In essence, there is no legal separation between you and your business. All the profits go to you and all of the liabilities and obligations of a sole proprietorship are your responsibility as well.

Business Name

In many states, you are required to register the name of your business if it is different from your legal name. So if your name is William Shakespeare and you want to open a business called William Shakespeare Books, you would need to file a DBA ("doing business as") name in the county or state where your business is located. However, in Wisconsin, registration for a DBA, called a "firm name," is optional. You can choose whether to file a Registration of Firm Names in the county or a trade name, another term for a DBA name, with the secretary of state, or neither. If you do file, you're required to pay a small fee and check county and state databases to make sure no one is already using the same name.

Ready to start your LLC? Start an LLC Online Now

Employee Identification Number

If your sole proprietorship has employees, you'll need to obtain an Employee Identification Number from the Internal Revenue Service, which is accomplished by filing Federal Form SS-4 with the IRS. Even if you don't have employees, some sole proprietors obtain EINs because it often makes it easier to open a bank account for the business.


Although it's easy to set up a sole proprietorship, you might need more than a stripped-down, basic-model new car. In a sole proprietorship, you're personally liable for the debts of the business, which can enable a creditor to go after your home and all of your other assets. Another type of business structure, such as a limited liability company, can enable you to shield your personal assets. It also offers you the same tax advantages as a sole proprietorship.

Ready to start your LLC? Start an LLC Online Now
How to Register a Sole Proprietorship in North Carolina


Related articles

Can a Sole Proprietor Have a Business in Multiple States?

For new business owners, complying with all of the laws in one state can be tricky. Owners who wish to conduct business in multiple states have additional, sometimes contradictory, requirements to juggle. Fortunately, the ease and speed in setting up a business as a sole proprietorship generally holds up across state lines. However, owners should be aware of specific local rules, particularly with regard to certain regulated industries, to ensure a successful multistate operation.

Sole Proprietorship Laws in Illinois

For individuals looking to start a business without partners, a sole proprietorship is a common business entity because it is straightforward to set up and has minimal tax and reporting requirements. In Illinois, as in other states, you do not have to register your sole proprietorship with the state. However, you are required to register an assumed business name, if you use one, and depending on the nature of your business, you may also be required to obtain other permits and licenses.

How to Operate an LLC Under a Personal Name

A limited liability company, or LLC, must register with a state. Part of the process of registering is selecting a business name that complies with state law. The registration process differs from state to state, but all states have the same two legal requirements for business names: the name must be distinguishable from any other business operating in the state, and it must include a suffix that alerts the public to the business's status as an LLC. Any name can be used, including the name of a person, as long as the name meets these two requirements.

LLCs, Corporations, Patents, Attorney Help

Related articles

Advantages & Disadvantages of Filing for a Fictitious Business Name

The name you use to conduct business can greatly affect the success of your endeavor. While you're required by state ...

How to Start a Company As a Sole Proprietor in Georgia

Sole proprietorship is the least regulated form of business in Georgia -- although you're personally liable for any ...

How to File a DBA on Your Own in Iowa

When you operate a business under any name besides the registered name or your own name if you are a sole proprietor, ...

How to Establish a DBA

A DBA, or "doing business as," is a name you use for your business besides your real name. DBAs are also known as ...

Browse by category
Ready to Begin? GET STARTED