A sole proprietorship is the most simple form of operating a business. However, sole proprietors are personally responsible for any liability related to the business he or she operates. For this reason, corporations and limited liability companies (LLCs) are usually a better choice for most businesses. Sole proprietors must obtain all necessary licenses, permits and ancillary documents required for the business being operated.
A sole proprietor needs to be especially careful if he or she is operating under a fictitious name, which is commonly referred to as an assumed name or “doing business as” (DBA). The requirements for adopting an assumed name are distinct for sole proprietors, corporations, limited liability companies (LLCs) and partnerships.
