Does a Sole Proprietor Need an EIN?
A sole proprietorship lets an individual launch a business alone as an "independent contractor" not incorporated. You file quarterly estimated taxes and a Schedule C. You’re personally liable for debt, losses, and liabilities. It’s difficult to partner with investors as no stock ownership.
Registering as a Sole Proprietor
When you start a sole proprietorship, your legal name is your business name. You have the option to create a separate business name, referred to as doing business as (DBA). If you plan to use any name other than your personal name, you’ll register a DBA name.
Registering and Operating a Sole Proprietorship
Registering your sole proprietorship as a DBA attracts business at a lower cost without forming an LLC. You can run multiple small businesses as a sole proprietor when you register a DBA for each.
Most sole proprietorships in Nova Scotia register with the Registry of Joint Stock Companies using their Sole Proprietor Registration Form. You don’t have to register if you are registered in New Brunswick, use only your name, or farm/fish.
Considerations for Sole Proprietorship
While a sole proprietorship is easy, it has disadvantages to consider as you start. We explain below and provide steps if you start one.
A sole proprietorship has one owner who has not registered as a corporation. As the only owner, you make all decisions and register at a lower cost. However, sole proprietorships don’t protect assets, so you’re liable for claims/judgments.