A sole proprietorship is the simplest and most common structure chosen to start a business. It is an unincorporated business owned and run by one individual with no distinction between the business and you, the owner. You are entitled to all profits and are responsible for all your business’s debts, losses and liabilities.
You do not have to take any formal action to form a sole proprietorship. As long as you are the only owner, this status automatically comes from your business activities. In fact, you may already own one without knowing it. If you are a freelance writer, for example, you are a sole proprietor. But like all businesses, you need to obtain the necessary licenses and permits. Regulations vary by industry, state, and locality.
In Texas, a sole proprietorship is a business structure where the individual owner and the business are legally considered the same entity. This means that the owner has personal liability for the business's debts and obligations. Establishing a sole proprietorship in Texas does not require formal registration with the state. However, if the business operates under a name different from the owner's legal name, the owner must file an Assumed Name Certificate (commonly known as a DBA - 'Doing Business As') with the county clerk in the county where the business is located. Additionally, the owner must obtain all relevant licenses and permits, which vary depending on the type of business, location, and industry. These may include state-specific licenses, sales tax permits, or local permits. It's important for the owner to comply with all regulatory requirements to legally operate the business in Texas.
