Sole Proprietorship in Washington State
Washington is home to over 600,000 small businesses spread over a diverse umbrella of industries from Aerospace, to clean technology, manufacturing, information and communication technology, e-commerce, and global health among others.
In Washington sole proprietorship, sole proprietors often choose this structure for its simplicity, making it suitable for small businesses. Nevertheless, the lack of liability protection compared to more complex entities underscores the importance of assessing potential personal risks.
Steps to Start a Sole Proprietorship
- Choose a business name for your sole proprietorship and check for availability.
- File a Business License Application with the Washington Department of Licensing.
- Get an Employer Identification Number from the IRS.
- Report Any New Hires.
- Open a bank account for your business.
Advantages and Disadvantages of Sole Proprietorship
A significant disadvantage to forming a sole proprietorship versus forming a company is that the owner is fully liable for all business debts. This means if a lawsuit is filed against the business, the owner (sole proprietor) stands to lose their personal assets.
Additional Information
Your business may need to obtain business licenses or professional licenses depending on its business activities. Washington provides a comprehensive website of every profession and occupation that requires a license by any sole proprietorship.
By Samuel Smith | Updated by David M. Steingold, Attorney.