Sole Proprietorship

[ZuulJin]

As a resident of Iowa... I'm looking to start a sole proprietorship to teach English to Japanese through a website.

I found this website: http://www.sos.state.ia.us/business/sole.html

There is a line on that page that reads:
"Easiest type of business organization to establish. There are no formal requirements for starting a sole proprietorship" & "There are no Iowa statutes governing the formation of a sole proprietorship."

Does this mean that I don't even have to formally setup the sole-proprietorship through the state (although that doesn't make sense to me)?
I understand that, as a sole-proprietor, I assume full reponsibility for anything that may go wrong with the business... I'm willing to accept that during startup. Is there a way to grow into an LLC or Corp. in the future (if the need arises)?

Thanks in advance!

[MBScott]

Does this mean that I don't even have to formally setup the sole-proprietorship through the state (although that doesn't make sense to me)?

Where I live, I had only to go to City Hall and pay a small fee for a business license. I didn't have to set up anything through the state at all. Every year, the city sends me a bill for renewal of my business license.

Is there a way to grow into an LLC or Corp. in the future (if the need arises)?

Yes, if you need to incorporate later, you can. For example, if you grow large enough to need employees or start to take on projects that your personal liability cannot cover, you can change.

Missy

[infonote]

The disadvantage of a sole ownership is that if you for e.g. gegt sued for a huge amount of $, your house, car (assets) will be taken while if you have a LLC, they can only take the LLC assets to recover the $, since the company is seperate from its owner.

[ZuulJin]

The disadvantage of a sole ownership is that if you for e.g. gegt sued for a huge amount of $, your house, car (assets) will be taken while if you have a LLC, they can only take the LLC assets to recover the $, since the company is seperate from its owner.

Well... I don't have any assets. I live with someone else, and walk everywhere I go. What are they going to take from me? My debt? ;D

In any event... I'll be teaching English to Japense through a website. I'll offer a full 30-day money back guarantee in the event they don't like their purchase. Each purchase is only ¥499 (about $4.35) per month.

I understand your warning... but doesn't my business proposal seem safe? What could someone sue me for?

[infonote]

Sorry i might have sounded extremely pessimistic.

What i meant was an example of a sole owner. That you and the company are 1.

I wish you the best of luck, not that you be sued or whatever else could happen.

I think the best thing is to contract an a lawyer or accountant. They will guide you best, as I am not a lawyer or accountant so i cannot give any legal advice.

[ZuulJin]

Sorry i might have sounded extremely pessimistic.

What i meant was an example of a sole owner. That you and the company are 1.

I wish you the best of luck, not that you be sued or whatever else could happen.

I think the best thing is to contract an a lawyer or accountant. They will guide you best, as I am not a lawyer or accountant so i cannot give any legal advice.

No, I knew you were giving advice and I appreciate that. I was aware that as a sole-proprietor the business and I are one. I want that... I want to get the business started as cheaply, and simply as possible and move up from there.

From the sound of my proposal, does it look like anyone could possibly have anything to sue me about? Perhaps there's something I'm overlooking.

[infonote]

No nothing, i was just thinking of a worst case scenario.

I exagerrated a lot. I am the type of person who thinks of possible problems in advance, that's all.

[mniessen]

From the sound of my proposal, does it look like anyone could possibly have anything to sue me about? Perhaps there's something I'm overlooking.

I don't think so. Plus, with your money back guarantee you can argue that if the person didn't like the service, they just had to ask for a refund during that period.

Good luck with your business.

Michaël