Operating your small business as a sole proprietorship enables you to get your new enterprise up and running quickly and cheaply. In most states, a sole proprietorship does not have to file business formation paperwork with a state agency, like a corporation or limited liability company, so you can start transacting business at your own discretion. Regulations regarding the name that can be used for the business is the only legal requirement the owner must observe.


A sole proprietorship is a business activity that operates under the personal name and responsibility of the owner. Under state law, the owner can be sued for obligations that arise out of business activities. A judgment-holder can satisfy a judgment against the personal assets of the owner, such as the owner's house or family bank accounts.

States have a vested interest in ensuring the public can identify the responsible party behind business activity. In other words, state laws are designed so the public will know who to name in a lawsuit that involves the business. A sole proprietor is required by law to use his own name to conduct business. For example, a photographer named John Doe who conducts business as a sole proprietor must have his clients make out checks in the name of “John Doe” to pay for services. This tells his clients that he is personally responsible for anything that goes wrong with his photography services.


State law allows a sole proprietorship to use a name other than the owner's legal name to conduct business only if the business name is registered with the state as a fictitious business name, also known as a “doing business as” or DBA. A sole proprietorship can have more than one DBA and can have DBAs in more than one state, provided the names are properly registered before use. Registration allows the public to determine the responsible party behind the use of the name.


DBA registration is controlled by state law. Some states register DBAs on a statewide level. One registration through an agency such as the secretary of state's office allows the sole proprietor to use the name anywhere in the state. Other states require registration at the county or city level. In these states, the sole proprietor must register the name in every locality where it plans to do business. If a sole proprietor has a DBA registered in one state and wants to use it in another, the owner must register the DBA in the additional state before using it there. DBA registration typically requires the owner to fill out a form and file it with the appropriate fee. The registration is typically good for about seven years, but all states allow you to renew the DBA indefinitely.