Many business owners choose to launch their sole proprietorships in Tennessee. You are the single proprietor of your company and are in charge of all of its financial and legal responsibilities. Whether or not Tennessee sole owners need to register a DBA is one subject that comes up frequently.
DBA, which stands for “doing business as,” is frequently referred to as an assumed name or fictional name. It is a legal word used to describe a company that conducts business under a name other than the owner’s legal name. In Tennessee, unless they are using a name that is different from their legal name, sole proprietors are not obliged to register a DBA. You do not need to file a DBA if you are utilizing your legal name as your company name.
However, you must file a DBA with the Tennessee Secretary of State’s office if you decide to run your company under a name other than your legal one. A registration form must be turned in, a fee must be paid, and a notice must be printed in the neighborhood paper.
You are accountable for paying both federal and state income taxes as a sole owner in Tennessee. The amount you must set aside for taxes will depend on the revenue and outgoings of your company. A minimum of 30% of a sole proprietor’s income should be set aside for taxes. However, it’s always advisable to speak with a tax expert to figure out your precise tax liabilities.
You have a few options for paying yourself if you established an LLC in Tennessee as a sole proprietor. You have three options for paying yourself: a salary, a draw from your earnings, or distributions from your LLC. It is advised that you speak with a tax expert to figure out the best way to pay yourself from your LLC.
Being a single proprietor in Tennessee has numerous benefits, but there are some drawbacks as well. The major drawback is unrestricted personal liability. As a sole proprietor, you are liable for all of the obligations and debts of your company. This means that your personal assets may be at danger if your company is sued or unable to pay its debts.
Being a lone proprietor also has the drawback of having restricted finance options. As a result of their reputation as high-risk borrowers, banks and other lenders frequently hesitate to provide financing to sole proprietors. Finding the finance you require to expand your firm may become challenging as a result.
In conclusion, sole proprietors in Tennessee are not required to file a DBA unless they are operating under a name other than their legal name. A minimum of 30% of a sole proprietor’s revenue should be set aside for taxes, and they should also speak with a tax expert to assess their precise tax liabilities. You can pay yourself in a number of ways if you created an LLC as a single proprietor in Tennessee, but you should speak with a tax expert to choose the most advantageous one. Being a sole proprietor in Tennessee has many benefits, but there are some drawbacks as well, such as limitless personal liability and constrained finance options.