# Sole proprietorship



## LucasWoods (Oct 1, 2014)

Under a Sole Proprietorship you are not allowed to sell products under a different name/business name unless you have a "Doing Business As"? correct?

Does this apply if I have an Etsy shop that is not named after me but payments are still deposited into a bank account with my name on it?

I have been trying to search around the internet for this answer and can't seem to find much. I know the solution may be to just fork over the money and get a "DBA" if that would make things easier and more correct in the governments eyes.


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## Kazooman (Jan 20, 2013)

I do not know the answer to your legal question, but I would suggest that you may not get the best advice by posing the issue on a woodworking forum. Just look at the lengthy discussions about how best to adapt an existing 50 amp 220 outlet for a 20 amp tool. A series of posts from experts with varying opinions on how the electrical code comes into play, just what the circuit breaker is supposed to be protecting, change the plug or change the receptacle or change both, what gauge wire can actually fit into a 20 amp receptacle's terminals, is the concern the wire in the wall or the wire from the machine to the wall, etc., etc., etc. You may well get the correct answer to your question, but you will never know.

Ask someone who actually gets paid to know the answer and who is also responsible for giving you the wrong answer if that should come to pass.


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## TheDane (May 15, 2008)

Kazooman is right. You should be able to get good info from your Secretary of State's office.


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## DrDirt (Feb 26, 2008)

Slightly off topic - - but be careful about insurance.

If you are selling your work… your shop is not covered by your homeowners policy.

It was written up in Wood Magazine most recent issue. Someone talked about their house getting hit by a tornado and the garage shop was damaged.
the adjuster asked if he ever sold any of his work…. if he had answered yes, then they would have denied the claims on tools.

Not sure how set in stone that really is…. if you bake wedding cakes in your kitchen would claims be denied?
Or did crafting or quilting?

It feels like this SHOULD NOT be the case… but the word SHOULD is always tricky. ANd adjusters are always looking for ways to get out of paying.


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## Stewbot (Jun 7, 2015)

> Under a Sole Proprietorship you are not allowed to sell products under a different name/business name unless you have a "Doing Business As"? correct?
> 
> - LucasWoods


I think this type of thing will vary state to state and city to city, but in my city/state I believe this to be true. A fictitious business name is needed unless the surname of the owner is in the business name.


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## Gixxerjoe04 (Jan 31, 2014)

I've wondered about that Drdirt, wonder what kind of policy would be needed for that.


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## LucasWoods (Oct 1, 2014)

Thank you all for the inputs. I posed the question on a website that has thousands of lawyers to answer rando questions like mine lol.


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## LucasWoods (Oct 1, 2014)

Now how about this… Do most of you have an LLC?


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## Tim457 (Jan 11, 2013)

> If you are selling your work… your shop is not covered by your homeowners policy.
> ...
> Not sure how set in stone that really is…. if you bake wedding cakes in your kitchen would claims be denied?
> Or did crafting or quilting?
> ...


Of course it varies by policy, state, etc, but in general yes that's absolutely the case. You're not paying for business coverage so business property, inventory, and liability aren't covered. You can buy coverage though, anything from a rider on your HO policy to a separate business policy. A basic business policy didn't used to be much, but they've gone up like everything else. You have to decide if it's worth it to take the loss on all your stuff rather than paying for the policy.

Sorry I don't know the answer to the original question. I will say an LLC costs a decent amount if you have a lawyer set it up properly so you also have to decide if the liability protection it gives is worth the cost. Probably not unless you're doing decent volume. Of course you can set it up yourself and if you're careful and lucky you'll do it mostly right.


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## TopamaxSurvivor (May 2, 2008)

> Kazooman is right. You should be able to get good info from your Secretary of State s office.
> 
> - TheDane


+1

Having been an electrician for 45 years, I can testify the electrical guesses by novices are atrocious at times. I suspect the legal advice is worse.

After being in business for 25 years, I concluded there are no legal businesses. There are so many rules and regulations, there is no way you can discover them all, let alone comply ;-(


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## Puzzleman (May 4, 2010)

I did a INC. Was only a few hundred to get it done in my state of MO. The DBA was a minimal charge as well.
I figured it was just best to bite the bullet and not have to worry about it anymore. 
PS: did the business description as vague as possible so I am not locked into just woodworking, in case I moved into another type of endeavor.


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## TopamaxSurvivor (May 2, 2008)

If you do INC, apply for Sub-chapter S with IRS. It will make your life and requirements for taxes a lot easier.


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## helluvawreck (Jul 21, 2010)

I read the other day that every person averages breaking at least three laws a day. Everyday there are more and more laws and regulations. I built my shop independent of my house and my shop has it's own insurance under a corporation. According to my insurance agent the minute that you decide to sell anything for profit everything changes. If you operate out of a shop that is part of your house then you may jeopardize your home insurance so you need to talk to your agent.

helluvawreck aka Charles
http://woodworkingexpo.wordpress.com


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