A sole proprietorship is not a legal entity (even if it has its own Federal Tax I.D. Number). The borrowing entity is the individual who is operating the business as a sole proprietor. The person who is the sole proprietor is personally liable for all debts. The sole proprietor reports all profit or loss on his/her personal income tax (Form 1040, Schedule C). A person may have multiple d/b/a’s as shown in the chart below.
A copy of the Assumed Name Certificate is needed. This can be obtained from the county clerk’s office(s) in which the proprietorship conducts business. Note: An Assumed Name Certificate is valid for 10 years.
A Sole Proprietorship Resolution of Authority is needed if individuals other than the sole proprietor are allowed to sign on behalf of the sole proprietorship. A sample form is located at the end of this chapter.
EXAMPLE: The debtor John Lee Doe is doing business under the assumed name John’s Auto. The debtor’s name as shown on his most recently issued and unexpired driver’s license is John Lee Doe. The UCC-1 should list the debtor as John Lee Doe. John’s Auto should not appear on the UCC-1.