Sole Proprietorship Attorneys Cedar Rapids

If you want to form a sole proprietorship, do not hesitate to contact Arenson Law Group, PC. We can help you with every aspect of the business formation process.

A sole proprietorship is an unincorporated business one person owns. You can set one up in your name or operate under a trade name. Sole proprietorships offer various benefits other business structures don’t. For example, you don’t have to file multiple tax returns since your business isn’t a separate legal entity.

At Arenson Law Group, PC, we represent clients in multiple aspects of corporate law. We can guide you through the process of setting up a sole proprietorship or transferring from a different structure. We will protect your interests and handle the legal issues you face while operating your business.

Call Arenson Law Group, PC at (319) 363-8199 today for a confidential consultation with one of our Cedar Rapids sole proprietorship attorneys to learn more about how we can help.

How to Establish a Sole Proprietorship

Creating a sole proprietorship is relatively simple. You must follow these steps:

• Choose a name for the business – Typically, sole proprietors run businesses under their legal names. However, you can use an assumed business name or trade name. Ensure you don’t violate trademark law by picking the same or similar name to another registered business. To confirm your original business name, you can look at multiple databases, such as the U.S. Patent & Trademark Office or Iowa Secretary of State.
• File a trade name report – State law requires sole proprietors operating a business under a business name other than their legal name to file a report. You must file your trade name with the county where your business is located. You can find the necessary information in the county recorder directory.
• Obtain licenses and permits – You don’t have to obtain a general business license as a sole proprietor. However, depending on your business activities, you might have to apply for a professional or occupational license. You can learn about the requirements by going to the Iowa SBDC website. You should also check with your county and city governments to determine if zoning clearances, building permits, and other licenses apply to your business.
• Get an EIN – An employer identification number (EIN) isn’t mandatory for sole proprietorships. You can use your social security number. However, you might want to obtain one to reduce the risk of identity theft and open a business bank account. The IRS requires an EIN if you have employees who report their wages.

Frequently Asked Questions

At Arenson Law Group, PC, our Cedar Rapids sole proprietorship attorneys know how overwhelming forming and running a business can be. Below are answers to the questions clients commonly ask us. You should review them to understand sole proprietorships better. If you have questions we still need to answer, give us a call at (319) 363-8199 now.

What are the advantages of a sole proprietorship?

Sole proprietorships are beneficial for many reasons, including:

• Inexpensive and easy to form – Setting up a sole proprietorship is less complicated and expensive than other business structures. You don’t have to register with the state or comply with other requirements. Appointing a board of directors is also unnecessary since you’re the business’s sole owner.
• Complete control over operations – You can operate your business how you want. You control business hours, strategies, and other aspects without needing approval from someone else.
• Keep all profits – You don’t have to share business profits with anyone else while operating alone. Without a partner or shareholders, you don’t have to disburse the money you make to others.
• Less paperwork – Starting a sole proprietorship requires less paperwork than other business structures. You don’t have to worry about completing multiple forms to begin running your business.
• Simple tax filing – A legal distinction doesn’t exist between a sole proprietorship and the owner. You don’t have to file separate tax returns as an individual and business. You only file one tax return since income from your business passes to you.
• Unlimited employees – You can hire as many people as possible when operating a sole proprietorship.
• Change the structure anytime – You can change your business structure whenever you want. Most people start as sole proprietors to save money and grow their companies. You can transition easily to a corporation or LLC later if you start as a sole proprietorship.

Is there anything I need to do after establishing a sole proprietorship?

Typically, the work is done once you set up your sole proprietorship. Unlike other entities, you don’t have to file reports every year or hold shareholder meetings. However, there are some aspects of running a business you should consider:

• Purchase liability insurance – As a sole proprietor, you are personally liable for your business’s obligations and debts. You should obtain a general liability insurance policy to protect your finances during unforeseen circumstances.
• Open a business account – You can set up a bank account for your business to separate your personal and business assets.
• File and pay taxes – Reporting items, such as sales and use taxes, is a requirement depending on business activities. You must report taxes and file employee reports. If you have employees, reporting and paying employment taxes regularly is necessary. You must establish a tax account with the Iowa Department of Revenue and receive a business efile number (BEN).

Am I personally liable for my sole proprietorship?

Yes. Entities, such as limited liability partnerships and corporations, benefit from limited liability. However, sole proprietors are liable for legal judgments and business debts. You must use your personal assets to satisfy debts you owe if you can’t afford to pay. If someone sues your business, your personal assets are also at risk.

Contact an Experienced Cedar Rapids Sole Proprietorship Attorney

Arenson Law Group, PC has significant experience creating and handling sole proprietorships. We can be with you from the beginning and help resolve legal or operational issues that arise while operating your business.

If you want to learn more about starting a sole proprietorship, call us at (319) 363-8199 for a confidential consultation today.

Written by James H. Arenson