A sole proprietorship is a business owned and operated by one person.
To form a sole proprietorship:
- Choose the type of business you wish to operate.
- Pick a name for the business.
- Register the name with the appropriate local or state office.
- Obtain licensing to conduct the business if that is needed.
- Determine where the business will be located.
- Set up a record keeping system.
- Estimate financial needs for operation and where it will be obtained.
- Purchase any supplies and equipment needed.
- Open the doors for business.
- Business and income profits and losses are reported on your personal tax return.
- A sole proprietorship can include your spouse.
- Sole proprietors can set up retirement plans through a Keogh plan.