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Question added to topic Legal Basics For StartupsFebruary 26, 2010

Can I still collect unemployment if I have a sole proprietorship?

I recently got laid off from my full-time job. Now my small business only makes enough to cover my business expenses.
Generally, you cannot collect unemployment insurance if you are self-employed.

The purpose behind unemployment insurance is to provide assistance to workers who become unemployed through no fault of their own. The fact that your business is only breaking even may not really factor into the equation.

Becoming self-employed can be grounds for disqualifying you from benefits--but this can vary depending on state law. So it would make sense to consult with an attorney to get a clear sense of what you can and cannot do in your state.

Nina L. Kaufman, Esq. is an award-winning New York City attorney, edutainer and author. Under her Ask The Business Lawyer brand, she reaches thousands of entrepreneurs and small business owners with her legal services, professional speaking, information products, and LexAppeal weekly ezine. She also writes the Making It Legal blog.

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