What is a Sole Proprietorship
A sole proprietorship is a business that is owned and operated by a single individual. The owner has complete ownership of the business and is responsible for its debts, liabilities, and losses.
Starting a Sole Proprietorship
-
Choose a Business Name
- Select a unique and catchy name for your business.
-
Register Your Business
- Check with local authorities for registration requirements.
-
Obtain Necessary Permits and Licenses
- Research and secure any permits or licenses needed.
Pros and Cons of Sole Proprietorship
While a sole proprietorship offers simplicity and lower costs, it does not provide asset protection, making the owner personally liable for claims and judgments.
Do I Need to File as a Sole Proprietor?
Starting a sole proprietorship allows an individual to launch a business independently without the need for stock ownership. Personal liability for debts and losses is a consideration, making it challenging to partner with investors.
Registering Your Sole Proprietorship
Registering the business name with the proper authorities establishes legal identity and simplifies business operations by facilitating permits, licenses, and bank account opening.
Running Multiple Businesses as a Sole Proprietor
When registering your sole proprietorship as a Doing Business As (DBA), you can operate multiple small enterprises under different DBA names. This approach aids in maintaining organization and clarity for tax and legal purposes.
Sole Proprietorship in Nova Scotia
Most sole proprietorships in Nova Scotia register with the Registry of Joint Stock Companies using the Sole Proprietor Registration Form. Certain exemptions apply for registration in New Brunswick or for farming/fishing enterprises.
Tax ID Number for Sole Proprietor
Having a tax ID number is essential for a sole proprietorship to file taxes and fulfill legal obligations.