Do Sole Proprietorships Need To Register Ma Secretary Of State

If yous're currently self-employed in the state of Massachusetts, or if you're looking to enter the world of one-person business ownership, you've probably looked into becoming a sole proprietor.

The sole proprietorship is the simplest business 'format' in America, but that doesn't mean that in that location aren't rules and regulations to follow when you operate i. In addition, there are some limits to the functionality of a sole proprietorship.

In this guide, nosotros'll walk you through the steps to setup a sole proprietorship properly, and help you determine whether or not a sole proprietorship is a good choice for your business organisation.

Guru Tip: It's important to understand that a sole proprietorship does non offer personal asset protection equally the LLC (limited liability company) does. The LLC is the most pop entity for small businesses and is like shooting fish in a barrel to create – by doing forming it yourself or hiring a inexpensive LLC service.

How to Go a Massachusetts Sole Proprietor

When it comes to being a sole proprietor in the state of Massachusetts, there is no formal setup process. There are as well no fees involved with forming or maintaining this business blazon. If you lot want to operate a Massachusetts sole proprietorship, all y'all need to practise is start working.

However, just because it's so piece of cake to get started doesn't hateful there aren't some boosted steps you lot should take along the way. While these parts of the process aren't strictly required, many sole proprietors find that they are in their best interests.

DBA Acquisition

A doing business every bit (DBA) proper noun is a crucial office of many sole proprietorships, as it enables you lot to utilise an causeless proper name for your business, rather than your own personal proper name. The advantages of acquiring a DBA beginning with image ― most customers feel that an causeless name is more professional person and trustworthy than doing business concern with a company that uses its possessor's personal proper name instead.

That said, sole proprietors tin sign upward for a business bank account using their DBA name, which is some other step that goes a long way toward making customers experience more comfy doing business with you lot.

Before registering a DBA in Massachusetts, you'll need to check the name's availability with three unlike databases: the Secretary of Commonwealth corporate database, the reserved proper noun database, and the state trademark search. Afterwards confirming that your desired DBA is available, y'all must file a Registration of DBA form with the local county clerk or city role of the municipality in which your concern operates.

Get Your Business Domain

To fully embrace the business concern name, register your URL. With GoDaddy you'll be able to speedily build a company website so that nobody else tin can utilize or take it.

Determine Revenue enhancement Requirements

Sole proprietors without employees normally don't need to larn a federal tax ID number (EIN), because as a ane-person business, you can typically just apply your ain social security number for most things an EIN is used for. Still, if you would rather not utilize your SSN for privacy purposes, it would be a skilful idea to get an EIN regardless.

Beyond that, the nature of your concern volition determine which taxes apply to you equally a sole proprietor.

For example, if your sole proprietorship sells taxable goods or services within Massachusetts, you'll likely be required to pay sales and use tax. Yet, other tax liabilities will likely be besides. Fortunately, Massachusetts makes establishing your sole proprietorships revenue enhancement requirements quite easy, through MassTaxConnect, which allows you to register your business online with the state Section of Acquirement and pay all country taxes pertaining to your business.

Obtain Business Licenses and Permits

There isn't a requirement in Massachusetts for sole proprietors to larn a full general business license, but depending on the nature of your concern you lot may demand other licenses and/or permits to operate in a compliant way.

Massachusetts has hundreds of professional and regulatory business concern licenses; it'south likely that your sole proprietorship will need one (or several) to operate lawfully within the state. Fortunately, Massachusetts has plenty of resource that will guide you through determining your state licensing needs, such as the Massachusetts Permit Regulatory Office (MPRO) and the Professional Licenses & Permits Page of the Massachusetts government website.

In improver, you should cheque to see if your business concern needs any licenses or permits on the local level.

Often, larger cities such equally Cambridge, Worcester and Springfield will have their own license requirements that y'all'll demand to bide by if your sole proprietorship operates within city limits.

What Is a Massachusetts Sole Proprietor?

Equally opposed to a corporation or limited liability visitor (LLC), the sole proprietorship is not a legal business entity. The sole proprietorship is a one-person concern that is not considered to be a distinct entity from the person who owns it, and it is ofttimes operated using the owner's personal proper name.

Here are the 3 principal things you need to know:

Tax Responsibilities

Because at that place'southward no distinction betwixt the owner and the business itself, sole proprietors don't need to file business tax returns ― they instead simply claim any business profits or losses on their personal tax returns.

Contracts

Sole proprietors are immune to sign contracts using their personal proper name, and forth those aforementioned lines, customers tin write checks to the business by using the sole proprietor's name.

More than Flexible

The other big difference between sole proprietorships and more formal concern structures is the fact that sole proprietors are allowed to commingle business organization and personal assets equally much as they desire to. With LLCs and corporations, buying is required to keep their assets separate from those of the company. The downside of this aspect for sole proprietors is that if your business is sued, creditors are free to pursue your personal assets like your firm, machine, personal banking concern accounts, etc. For corporations and LLCs, creditors are express to your business assets.

Conclusion

While the sole proprietor is such a simple business organization classification that Massachusetts doesn't even require a business registration process or whatsoever blazon of fees, depending on how you utilise your sole proprietorship and what industry you operate in, you still might have some important steps that need to be taken.

When it comes to issues of tax, licenses and permits, or fifty-fifty the name you want to call your sole proprietorship, you exercise need to exist vigilant to make sure you're not overlooking anything.

We hope this guide helped you answer any questions you had for sole proprietorships in Massachusetts, and we wish you lot success with your business!