Sole proprietorship is the default business entity for freelancers. Registering your business, structuring your freelance business, and running your freelance work as a business will help you be successful long term. Steps and costs of registering a freelance business vary depending on where you live. While LLCs provide freelancers with liability coverage they didn’t get as a sole proprietor, an S. Corp allows freelancers to pay less in self-employment tax. It comes down to which structure best aligns with your business wants and needs.
One of the first decisions you have to make after deciding to go freelance is to choose the right type of legal structure for your practice. There’s a lot to research and consider before you make the final decision. Depending on which legal structure you choose for your freelance business, you’ll be taxed differently.
Do freelancers need a business name? Freelancers need not register legally as a business. However, they should comply with taxation laws and regulations. Understanding regulations ensures freelancers operate legally. Locations have varying regulations for freelancers to know. Registering also builds reputation.
Naming Considerations
Naming the business allows telling a personal story. This works for many freelancers. Branding after oneself simplifies life with clients and taxes.
Deciding on a company name depends on positioning. Using a personal name or business name have advantages and disadvantages.
Sole proprietorships operate under personal names transparently. This builds lifestyle businesses, with the person married to their profession.
Transitioning from a personal to a business name need not scare clients. Part of a larger business growth strategy, an alternate business name can increase income.
Unique business names must be registered yearly for a fee. Following naming rules prevents rejection.