Legal Question in Business Law in California

In a sense, it's as easy as falling off a log. A kid running a lemonade stand or mowing lawns has formed a sole proprietorship. A sole proprietorship is formed by going into business by yourself (or with employees who aren't partners) and refraining from forming an entity such as a corporation or LLC. There are no forms to fill out, no applications to file. You just go into business.

However, I hasten to add, there are many additional steps the entrepreneur should consider, and perhaps take, on the way to setting up and running a successful sole-proprietorship business. How to set up and run a business is way beyond the scope of a LawGuru answer, partly because it can take a lifetime of experience, perhaps on top of a Harvard Business School MBA, to really know even the majority of the skills one might need, and partly because we answer questions about law, not management. Well, primarily at least.

I'd get a book or two, paperbacks are fine, about how to be your own boss, or how to set up and run a small business, and read them from cover to cover.

I agree with Mr. Whipple. Any business you run yourself is basically a sole proprietorship. Of course, you still have to comply with local business license laws, but you do not have to prepare paperwork like the people who form corporations or limited liability companies.

The previous answers are correct, but probably not what you were looking for. Just by doing business by your self or with employees or contractors but no co-owners of the busines, you have formed a sole proprietorship as Mr. Whipple said. To be in compliance with the law, however, there are other things you must do. If the name of the business in not just your name or your name with a descriptor, such as Timothy McCormick, Attorney at Law, or "Tom Jones Construction," you will need to file a fictitious business name statement in the county where your business is located. You will probably have to have a city or county business license. You don't have to get a separate taxpayer ID for the business, but if you will have employees it is not a bad idea, and you will have to get an employer ID from the state if you have employees. Your city or county most likely has either a business development office or at least someone at the city or county clerk's office who handles these issues and they usually are happy to help you get set up the right way. There are lots of other requirements that are specific to different businesses, which is too much detail to go into here.