Although New York is a fantastic destination to launch a business, you must first register your company with the state before you can start doing business there. In New York, a DBA, or “Doing Business As,” is one of the most popular ways to register a firm. The cost, many types of sole proprietorship firms, drawbacks of being a sole proprietor, how to pay yourself from an LLC, and taxation of sole proprietorships are all topics we’ll cover in this article about creating a DBA in New York. What is a DBA, exactly?
A DBA is a legal designation that permits a business to conduct operations under a name other than the owner’s legal name. For partnerships and sole proprietorships that desire to operate under a name that is more memorable or marketable, this is a popular procedure. A DBA is also referred to in New York as a “assumed name” or “fictitious name.”
Depending on the county you file in, a DBA in New York has a range of fees. The price is $100 in New York City although it is normally between $25 and $35 in other counties. Before filing, make sure you have all the essential information because these fees are paid to the county clerk’s office and are not refundable. Examples of Businesses with a Single Proprietorship
In a sole proprietorship, the owner is the only employee and has total authority over all business operations. Independent contractors, freelance writers, photographers, and hairdressers are a few examples of single proprietorship firms. Cons of Operating as a Sole Proprietorship Although operating a single proprietorship can offer benefits, it’s necessary to take the drawbacks into account as well. Being a lone proprietor has a number of drawbacks, chief among them being the owner’s personal liability for any debts or legal troubles resulting from the business.
If you are an LLC owner, you can pay yourself a salary as well as distributions. You are regarded as a member of an LLC as its owner, and you have the option of paying taxes as either a sole proprietor or a corporation. You can make payments to yourself through distributions if you decide to be taxed as a sole proprietor. You can pay yourself a salary if you decide to be taxed as a corporation.
The owner of a sole proprietorship must record the business’s income and costs on their personal tax return because they are taxed as pass-through companies. Having no taxes on the firm itself can be advantageous, but it also means that the owner must pay self-employment taxes, which can be more expensive than ordinary payroll taxes.
In conclusion, registering a DBA in New York is a necessary first step in launching a company, and the cost varies by county. In New York, sole proprietorships are a typical kind of business, but they have pros and cons. If you are a sole owner, you will be taxed as a pass-through entity, however if you are an LLC, you can pay yourself through a combination of salary and distributions. When launching a firm in New York, it’s crucial to take into account each of these criteria.
Yes, you can run a sole proprietorship and sell online. But it’s crucial to remember that, depending on the size and type of your company, you might need to apply for specific licenses and permits in order to function legally. You should also think about the liability concerns involved with being a sole proprietor and assess whether setting up a different legal structure, like an LLC, could be a better choice for your company.