November 10 2007
By MoneyBlueBook

What a nice lazy Saturday afternoon. I think I will go file my paperwork to obtain a Business Trade Name Certificate.

I have a decent full time job in finance/law and I also write for a few blogs on the side for fun. Although I see blogging as more of a hobby, I think I should start treating it more like mini-business. I could choose to set up the blog business in a variety of ways depending on my choice of business entity. The primary ones are corporations, limited liability companies (LLC), limited partnerships, and limited liability partnerships. Each type has its own advantages and disadvantages in regards to liability protection and taxation benefits. There are even fancier and longer named options such as limited liability limited partnerships. But since it's just me for now and I don't plan on taking on business debt or expanding the business for some time, my current chosen business entity will be that of a sole proprietorship. Besides, right now I don't feel like having to deal with filing LLC Articles of Organization papers or having to pay pricey incorporation fees.

Find the right credit card for you

What type of card do you want?

Low Interest Cash Back Low Intro Rate Balance Transfer Gas Rewards Credit Card Deals Miles/Points Student Credit Cards Business Credit Cards Bad Credit

How much do you charge per month?

• More than $2,500
• Less than $2,500

Do you carry a balance?

• Always
• Sometimes
• Never

Related Articles 0% Balance Transfer Cash Back Credit Cards Free Airline Credit Card Miles

 

Sole Proprietorships Are Easy To Create

Legally, any one can start up a sole proprietorship. You could set up a cardboard table and start selling lemonade and that would be considered a sole proprietorship business. There are no fancy or extra paperwork to create the business entity other than compliance with any relevant state and local licensing and taxation requirements. Sole proprietorships are considered flow through entities, which means that all profit and losses will go straight to the owner and all income generated by your sole proprietor business will be considered your own ordinary income. You can still generally deduct business related expenses for tax purposes, but it has the least amount of tax benefits compared to the other entities. But it's the easiest to create with the least amount of government regulation. Since I'm lazy, I'll put off considering more complicated business entity choices for now.

Filing a Trade Name, aka Doing-Business-As Certificate

Although I'm sticking with the easy choice for now, someday, the business might grow to the point where I will need to change business entity to take better advantage of tax breaks. So that's why instead of running this side blog business in my own name I want to operate it under my chosen business name. It'll be easier to differentiate and separate my personal operations from that of the business in the future.

Filing an application for a trade name in my state of Maryland is easy and is done through the Maryland State Department of Assessments and Taxation. Filing cost is only $25.

Thinking for the future, I could also consider filing for a federal trademark now to protect the mini-company's brand name, but it's not really necessary at this time. Filing for a federally registered trademark is expensive and can cost upwards of $300. For now, I'll just rely on common law protections until the day I decide that I need constructive nationwide notice of my trademark.