Preparing to Launch

Forming a Sole Proprietorship: Pros and cons

Updated October 31, 2022
Share this guide

The basics

Many first time business owners begin their journey with a sole proprietorship. This is because there is no formal filing process. The government simply considers your business to be a sole proprietorship until you file to organize under a more formal structure. A sole proprietorship is automatically formed as soon as you take in your first dollar.


  • Ease of formation

    As mentioned above, there is no formal filing procedure to establish a sole proprietorship.

  • No additional tax filings

    There is no separation between the finances of a sole proprietorship and its owner.  As a result, all of the company’s income is reflected only on the personal tax returns of the owner.  

  • Lack of continuing paperwork

    There is no administrative paperwork required to maintain a sole proprietorship.

  • Lack of compliance requirements

    Sole proprietorships are typically free from all of the ongoing compliance requirements placed on other business structures.


  • Self-employment taxes

    Even though dealing with your business’s taxes on your personal tax return may sound simple, it isn’t completely fool-proof. There are many tax obligations that self-employed business owners are responsible for.

  • Personal asset protection

    Should your business not succeed, your personal assets may be seized in order to satisfy your business’s debts. The more formal business structures offer separation, and therefore protection for your personal assets.

  • Business reputation

    Since the bar for forming a sole proprietorship is so low, some investors, partners, or clients may question the legitimacy of your business.

Swyft can help!

Do you have questions about sole proprietorships? The experienced agents at Swyft are here to assist you.  Contact us today!

Originally published on October 31, 2022, and last edited on October 31, 2022.

Frequently Asked Questions

Looking for answers? You came to the right place. To learn more about our company mission and culture, click the link below.

How much does it cost to form a Corporation or LLC?

Swyft Filings charges only $49 + state filing fees to incorporate your business. Filing fees vary from state to state. If you have a question about a specific state, feel free to email or contact us at 877-777-0450.

After completing my order, will I have to pay additional fees to your company?

No. For business filings, you paid the total price for your order at the time you placed it. 

However, if you signed up for the Swyft Filings Registered Agent Service, you will be charged for this service when the state grants your company a Certificate of Formation. This recurring fee will be automatically charged to your account for each period the service is active unless you change your Registered Agent with the State or dissolve your company.

When will my order be processed?

Orders are processed as they are received. However, clients that select Express Processing or Same Day Processing will have their orders processed before Standard Processing orders.

How long does the incorporation process take?

Incorporation times vary from state to state. Feel free to contact us by email or at 877-777-0450 for information on specific state processing times.

Swyft Blog

Everything you need to know about starting your business.

Each and every one of our customers is assigned a personal Business Specialist. You have their direct phone number and email. Have questions? Just call your personal Business Specialist. No need to wait in a pool of phone calls.

Should Artists Start an LLC?
Managing Your Business

Should Artists Start an LLC?

Your business credit score is an essential figure to estimate the creditworthiness of your business. Let us walk you through the credit scoring process.
Blog Card Image
Preparing to Launch

5 LegalZoom Alternatives for Entrepreneurs

If you’ve considered forming a Limited Liability Company (LLC), corporation, or nonprofit, you’ve probably heard of LegalZoom. This service has helped entrepreneurs with business formation since 2001.
Blog Card Image
Managing Your Business

Quoi Business Duo Focuses on Accessible Sustainable Healing & Community Outreach

Your business credit score is an essential figure to estimate the creditworthiness of your business. Let us walk you through the credit scoring process.
Blog Card Image
Preparing to Launch

The Responsibilities of a Registered Agent

Naming an individual as your business’s registered agent is a necessary part of incorporating any business.
Blog Card Image
Preparing to Launch

Why Should You Start Your Own Business?

While owning a business can be one of the most rewarding (and lucrative) decisions you can make, it is always good to look at both the pros and cons of business ownership before opening a company.
Blog Card Image
Preparing to Launch

Ready to start a business? Get it right from day one.

While running a business can be a very rewarding experience, there are several essential steps that need to be taken to ensure that your company is primed for a successful launch.

Do what you love. We'll handle the paperwork.

Trusted by over 250,000 businesses since 2015. Start your business with confidence. Affordable. Fast. Simple.

Incorporate now
Dummy Switchback Image