How can I verify a business is legitimate? Check out the company’s address, phone number, and website to make sure they look legitimate. If you can, visit the company’s physical address and talk to the people who work there.
To find more information on sole proprietorships or partnerships, visit the county clerk where the business is located and look at the Fictitious Business Name filings. To search the Secretary of State database, you need to have at least one of the following information with you:
- Entity Name
- Entity Number
Sole Proprietorships in California
EIN for Sole Proprietorships
Do I need an EIN as a sole proprietorship? If you are looking for a specific sole proprietorship in California, you can sometimes search by the entity number (EIN), the identification number provided by the California Secretary of State. Sole proprietors don’t always need to obtain an EIN and often use their private social security numbers instead.
Registration Cost
How much does a sole proprietorship cost in California? The filing fee is $26. In order to complete the application process for registering a fictitious business name, the business owner must publish the statement in a well-known newspaper within the county for four consecutive weeks.
Taxation
How does a sole proprietor pay taxes in California? Sole proprietorships don’t pay taxes or file tax returns. Simply file IRS Schedule C, Profit or Loss from Business, along with your personal tax return.
Defining Sole Proprietorship
What is a sole proprietorship? A sole prop is a business owned by one person. When you run a sole proprietorship, you’re liable for everything the business is liable for. If your business owes money, you owe that money. And if someone sues your business, they’re suing you.
Sole proprietors don’t pay business taxes. File IRS Schedule C along with your personal tax return.
Ultimately, a sole proprietorship allows you to start a small business and try a low-risk venture before a registered entity. Once established, an LLC enables you to take your idea and turn it into an entrepreneurial success.
LLCs vs. Sole Proprietorships
LLCs protect personal assets. Banks offer more funding options for LLCs. Investors see LLCs as safer, so they’re more willing to invest in them.