A sole proprietorship is one of the easiest business structures to form. You have complete control over all aspects of the business. You must obtain any applicable licenses and permits necessary to operate your business. Also, many sole proprietors register a “doing business as” or fictitious name with the secretary of state, if they intend to operate the business under an assumed name.

Professional Licensing

States regulate the licensing procedures for anyone intending to provide business services to others under specific occupations, such as lawyers, real estate brokers, accountants, electricians, plumbers and more. Each state’s professional licensing division enforces the licensing regulations for specific occupations. The license demonstrates that an individual has the knowledge level and expertise to practice in these occupations. With most occupations, candidates for licensure must complete the educational requirements and pass all of the required standardized examinations.

Federal Employer Identification Number

If you intend to hire employees and pay wages, you must apply for a federal employer identification number with the Internal Revenue Service. You may visit the IRS website and apply online for your FEIN or apply over the telephone. When registering a business, sole proprietors are required to provide their Social Security number or federal employer identification number on the application form.

Register a Business

Each state requires business owners to complete the appropriate applications and pay the required fees to register a business. In most states, sole proprietors must register their businesses with the office of the secretary of state, the county clerk’s office or other local government office designated for registering a business. As you prepare to register your business, you will need to provide your legal business name, mailing address, telephone number and physical location of the business, if applicable. You will also be required to describe the nature of your business and proof of any required professional licenses. If you intend to sell certain goods, including tobacco, cigarettes and alcoholic beverages, most states will require you to obtain a permit.

Trade Name or DBA

You have the option of engaging in business activities as a sole proprietor by using your legal name, trade name or “doing business as” name. Business owners must provide these names on the application forms to register a business, and the department of state in each locality determines if the name is available or whether another business is currently using the name.

Sales and Use Tax

You may be required to obtain a sales and use tax permit, if you intend to sell certain taxable items within the state and out of state. For instance, sales tax is apportioned to the transfer of possession of specific taxable items within the state. Use tax is due on taxable items being purchased from out-of-state businesses.