Legal Question in Business Law in Ohio
sole proprietor
I am going to be a distributor of wedding gowns in the US for a manufacturer in Hong Kong. I have chosen the name with ''Ltd'' after it (i.e. Paul Jones, USA, Ltd.) to remain uniform with the company names overseas (i.e. Paul Jones, Europe, Ltd.). I am going to set the business up as a sole proprietor for the time being. Can I legally use the term ''Ltd.'' after the name being that I did not incorporate or am not being set up as a Limited Liability Company? I did not want to set up as a corporation until I started to see a profit or at least some cashflow. The manuf will be shipping to me, I in turn will invoice and bill the stores for the wholesale cost, the stores will pay me, I will take my 15 % commission cut and send the rest to the manufacture in Hong Kong. The manufacture is concerned because they have to apply for a textile export license and the information must be 100 percent correct. I have already registered this name with the IRS and have been issued a tax ID number. I would appreciate any information. Thank-you so much.
2 Answers from Attorneys
Re: sole proprietor
The IRS will issue a tax id. number to almost anyone who makes a request, however the tax id. number has no bearing on the formal status of any business entity. To use "Ltd." you must be a corporation, limited partnership, or a limited liability company. If you use "Ltd." you are holding yourself out to the public as something you are not. Becoming a limited liability company is not very expensive, and is the good form of insurance against personal liability. Please give me a call at 216.241.2500 if you would like to discuss your options.
Re: sole proprietor
With your fed id you are well on your way...you MUST be a limited liability company in order to put LTD on it, but becoming an LLC is easy and doesn't make you a corporation.
Call me directly:
Joe Jacobs 216-952-1990 / 216-227-0900
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