Consultant’s Corner: Filing for a Sole Proprietorship
Question: How do I file a sole proprietorship under the same name in the state of California?
You can review the other basic steps to forming a sole proprietorship in California through the following government and business resources, which include these general considerations:
- File for a fictitious business name (optional)
- Obtain Licenses, Permits, and Zoning Clearance
- Obtain an Employer Identification Number
- Open a business bank account
- Obtain general liability insurance
Filing for a DBA
If you plan to operate your business under a name other than your legal business name, you will need to file for a DBA (short for “doing business as”) registration. In some jurisdictions, this is also known as a “fictitious business name,” “trade name,” or “assumed name.” You can see more on DBAs in the article below:
Business licensing and registrations
You can research the applicable business license and other registration requirements for your planned business activities and location and locate filing resources through your city, county, and state websites.
Tax identification numbers
A sole proprietorship is not required to obtain a Federal Tax ID number, also known as a Federal Employer Identification Number or EIN, from the IRS unless the business pays wages or is required to file pension or excise tax returns; however, we generally recommend that a sole proprietorship or similarly taxed LLC have an EIN for the business in order to establish a history of business transactions for commercial purposes. Federal Form SS-4 is used to apply for an EIN, so before contacting the IRS to obtain an EIN you will need to complete this form. Once you have completed Form SS-4, you have the choice of applying online at the IRS website, by contacting the IRS by phone, or by faxing or mailing your completed Form SS-4 directly to the IRS. You can obtain an EIN immediately by applying online or over the phone. Form SS-4 can also be downloaded from the IRS website. You can also find information on EIN requirements, application forms and filing instructions through the IRS website here:
Once you have completed these steps, we would recommend that you open a separate business banking account and the look to obtain general liability insurance for your business. You can see more about this in the links provided below.