New Jersey Sole Proprietorships

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Persons conducting a social enterprise alone in the State of New Jersey without the protections afforded by incorporation are called sole proprietors. A sole proprietorship has no legal existence apart from its owner and may be formed without any expense or formality. Profits and losses are borne directly by the proprietor. The proprietor may operate under a trade name by filing a Certificate of Trade Name directly with the county clerk in each county in which the sole proprietorship conducts or transacts business, along with a duplicate copy for filing in the Office of the New Jersey Secretary of State. Such registration provides limited protection for exclusive use of the business's name, absent trademark or service mark registrations.

There are county fees for filing certificates of trade name.

The main disadvantage of sole proprietorship is that the owner is wholly liable for all debts and obligations of the enterprise. All of the personal assets and assets devoted to the social enterprise can be seized to make payments. A sole proprietorship itself cannot be sold since there is complete unity between the enterprise and its owner, but the assets used in the enterprise can be sold. A sole proprietorship terminates upon the death of its owner.

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