The IRS defines a sole proprietorship as any “company that is not incorporated or registered with its state as an LLC.” In other words, it’s possible to launch a legally recognized business without going through the painful process of forming an official corporation.
In fact, sole proprietorships are the most common business structure in the U.S. — used by successful entrepreneurs all over the country. Much of this popularity stems from the many benefits that sole proprietorships offer.
The most obvious benefit is that you maintain total control over your business — with all profits coming to you, the owner. This is in sharp contrast to partnerships, LLCs and other types of corporations where profits must be shared among all named owners.
Better still, sole proprietorship taxes are passed through the business. This means you report all profits and losses on your personal income taxes. Your business doesn’t have to file or pay corporate taxes separately.
However, the biggest advantage of a sole proprietorship is simplicity. Starting, maintaining and dissolving your business requires minimal paperwork. This speed and convenience appeal to many aspiring entrepreneurs.
The only real filing requirement involves applying for an Employer Identification Number (EIN).
EINs (aka Tax IDs) are an essential requirement for sole proprietorships. Even if you’re currently the only person in your business, you need an EIN to:
In addition, many third-party vendors and suppliers will need some type of government-issued Tax ID in order to work with you. If you don’t have a sole proprietorship EIN, you’ll have to supply your personal Social Security number instead.
Not only does this expose you to potential identity theft, but it also diminishes the perception that your business is professional and legitimate.
Although sole proprietorships have the fewest filing requirements of all business structures, there is still some paperwork involved. As such, it’s not uncommon for entrepreneurs to get stuck when dealing with confusing forms, complex legalese or long delays.
At GovDocFiling, however, we’ve simplified the process to help you get up and running as quickly as possible.
With our one-page form, you can apply for an EIN in minutes — instead of the many hours needed to request a Tax ID directly through the IRS.
However, our support doesn’t stop there.
After successfully launching your business, you still benefit from:
Every second filling out forms or waiting for approvals is a second taken away from more important tasks — like growing a successful business.
However, you can avoid these hassles and delays by using our streamlined EIN approval process.
To get started, apply for your Sole Proprietorship Tax ID today.