Starting a Business – Sole Proprietorship

“Opening a store is easy, keeping it open is an art” -Chinese proverb

[Starting a Business] An entrepreneur forms and operates a new business by himself or co-founds the business with others. Starting a business requires the individual or group to make a decision as to whether the business should operate as a major form of business organization or under some other available legal business form. Often times, the decision comes down to ease and cost of training as the primary factor. When ease of installation is an important factor, many entrepreneurs choose to start in business as a sole proprietor. This article will discuss how entrepreneurs start and do business as a sole proprietor.


There is no paperwork to create a sole proprietorship since this type of business is not a separate organization. In fact, this type of business is easy to create without any approval requirements from the federal or state government. There are some local governments that require individual companies to obtain licenses to do business within the city.

“Doing business as” – dba

The acronym for “doing business as” is dba. The term “doing business as” refers to the option for a sole proprietor to operate under the name of the sole proprietor or a trade name. This practice is evidenced in the following language: “Bill Gates d/b/a Software Company of the World”. In this example, the well-known creator of the software may operate as a sole proprietorship under the name “Bill Gates” or under the trade name “Software Company of the World.” Operating under a trade name is commonly designated as a dba (for example, Bill Gates, doing business as “Software Company of the World”).

Most states require all businesses operating under a trade name to file a Fictitious Trade Name Statement (or Trade Name Certificate) with the appropriate government agency. Included in the statement are (1) the applicant’s name and address, (2) the business name, and (3) the business address. In addition, the state will require that a trade name notice be published in a newspaper of general circulation serving the area in which the applicant does business.

These requirements are established for the purpose of disclosing the name of the beneficial owner to the community. A fine may result from failure to comply with this requirement. Some states prohibit violators from upholding laws in state courts.

Although a sole proprietorship can grow to a considerable size, most are small. Many small businesses and some large ones operate this way. In a sole proprietorship, the owner and the business are one in the same; therefore making it the simplest way to start a business and the most common in the United States. Be sure to observe and follow all local requirements related to starting a business as a sole proprietor as you “carve your own path” to business success.

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