A sole proprietorship is the simplest and most common form of business. It’s easy to set up, there are minimal paperwork and fees, and you are in complete control.
Let us look at the four steps required to start a sole proprietorship in Pennsylvania!
As a sole proprietor, you may use your own given name or use a fictitious business name.
For example, if you are Joe Greene, you can do business as Joe Greene, sole proprietor. Alternatively, you can create a fictitious business name like “Mean Greene Landscaping" and register that with the Pennsylvania Department of State. If Joe uses “Mean Greene Landscaping,” he must register it with the PA Department of State to be sure this name is not being used by another business. There is a $70 fee. Joe must also publish an advertisement in a newspaper and a legal publication.
Some businesses need a license to operate. It depends on the industry. You may want to check that with our business consultants at Duquesne University SBDC. For example: No license is required to cut grass. However, if Joe decides to apply pesticides, he will need a commercial pesticide applicator license from the Pennsylvania Department of Agriculture.
As a sole proprietor, you don't have to get and Employer Identification Number. But there are two reasons to get an EIN. First, if Joe hires employees, he must have an EIN. Second, banks usually require an EIN to open a business bank account. EINs are able to be obtained from the IRS online at no cost. Learn more about getting an EIN here.
Whether you are an LLC or a sole proprietor, it is vital to seperate your personal and business account. This would not only help you to build business credit but also help you to stay legally compliant and protected.
Once Joe completes these four steps, Mean Greene Landscaping will be in business as a sole proprietor.
Our consultants at the Duquesne University SBDC can walk you through all of the steps to establish a sole proprietorship and start your new business. Contact us for help today!
The Duquesne University SBDC provides free business consulting for entrepreneurs in the Greater Pittsburgh area. Click here to request no-cost, one-on-one consulting for additional help and information.
Don Lodge is a Business Consultant at the Duquesne University Small Business Development Center (DUSBDC). He is also a certified business coach who has worked with over 100 small business clients since 2002. His areas of expertise include profitability improvement, effective sales techniques, and employee relations.