Sole Proprietorship

Formation
The sole proprietorship is the easiest and least expensive to start. You simply start doing business. There are some states that will require you to register the name of your business. Kansas does not require this. However, Missouri does require a “fictitious name registration.” Check your own states laws before proceeding.

Administration
This is one of the easiest forms of business to administer. (However, there is a temptation to mix business assets and personal assets together. While this is not strictly improper in many states, it makes it more difficult to recognize and treat your business like a business instead of a hobby. If you will take loss deductions on your taxes, you need to look like a business.)

Control
You have complete control of every aspect.

Asset Protection
There is absolutely no asset protection for a sole proprietorship. All business assets and personal assets are vulnerable. Your only line of defense is insurance.

Taxation
All of the income and losses of the business are taxable to you as an individual.  You file your tax return and include a Schedule C for the business portion of your income.  Generally you will use your Social Security Number as your taxpayer ID.

Going Concern
When you die, the business ceases.

Discounting
There are no discounts allowed by the IRS for the value of a sole proprietorship.  If your estate value is such that you would like to tell the IRS that assets of the business are worth less than fair market value, you should consider another form of business to operate under.