You might need to recruit additional support as a sole proprietor to finish chores or projects. Hiring independent contractors, also referred to as 1099 employees, is one way to accomplish this. However, the issue of whether a sole proprietor can employ 1099 workers emerges. Yes, a single proprietor can recruit 1099 workers, but there are a few things to take into account.
First and foremost, it’s critical to comprehend the distinction between a single proprietor and an LLC. A sole proprietorship is a type of business organization where one person owns and runs the company. An LLC (Limited Liability Company), on the other hand, is a distinct legal entity that safeguards the owner’s personal assets from company responsibilities. Sole proprietors are not permitted to form LLCs.
Let’s now discuss made-up names. A fictitious name is a name that a business employs instead of the owner’s given name. It is often referred to as a “Doing Business As” (DBA) name. Because it is not the legal name of the business owner, it is referred to as a fictitious name. If John Smith has a company called “John Smith’s Landscaping,” for instance, he is allowed to register a fake name like “Green Thumb Landscaping.”
Each state has a different fee for registering a fictitious name. The registration cost in Pennsylvania is $70.00. It is crucial to remember that registering a fictitious name does not give the business owner any legal protection. Create an LLC or another type of legal entity if you wish to shield your personal assets from business responsibilities.
Let’s finally talk about the reason it’s termed a bogus business name. Simply put, the word “fictitious” indicates either not real or made up. Given that it is not the legal name of the company owner, a business name is referred to as fictitious. Instead of using their own name, the company owner opts to use this name.
In conclusion, a sole owner can employ 1099 workers, but it’s crucial to understand the distinctions between an LLC and a sole proprietorship. Furthermore, creating an LLC is not the same as establishing a fictitious name, and it does not give the business owner any legal protection. The word “fictitious” in fictitious business name refers to the fact that the owner of the company is not identified by that name in the legal sense.