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Any licenses needed to start up a sole proprietorship?

Berlin, MD |

I want to start a beach umbrella rental business as a sole proprietor. Do I need to file anything with the state before I start?

Attorney Answers 2

Posted

No- you are the business. There is nothing to file. Just remember to report your income! Also, you will have personal liability for all debts of the sole proprietorship business. Good luck!

This advise is only being offered as a courtesy. We do not have an attorney-client relationship and I do not represent you.

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Posted

Not as such, but you will probably need a trader's license from the city. You will also need a "license" to collect sales taxes--really just an ID number. You get that from the State Dept of Assessments. I am attaching a helpful link they have.

Contact me if you have any other legal issues, or to discuss why you may benefit from having an LLC.

Licensed in Maryland with offices in Maryland and Oregon. Information here is general, does not create a lawyer-client relationship, and is not a substitute for consulting with an experienced attorney on the specifics of your situation.

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2 comments

Martin L Bearg

Martin L Bearg

Posted

Although not admitted to practice in MD, I would add to Mr. Marcus's comments by noting that as are unlikely to run this business using your own name, you probably need to file a trade name certificate. You should speak to Mr. Marcus as to which state or county agency this is filed with. In addition, make certain you keep separate books and a separate bank account to track income and expenses to properly report sales tax and income tax.

Martin L Bearg

Martin L Bearg

Posted

BTW: As innocuous as the rental of beach umbrellas may seem, you should take Mr. Marcus's advice to form an LLC and secure liability insurance just in case a wind takes an umbrella and it flies into someone or a car or window. If forrmed, you will need to file a Certificate of Organization or Formation and secure a Federal Tax Identification Number. As the sole owner, although working through an entity, you will be treated for tax purposes as a sole proprietorship (the LLC will be treated as a "disregarded" entity-not subject to tax, but subject to an annual report fee.

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