You might be thinking about using a sole proprietorship as your business structure if you’re hoping to launch a small business in New York City. The simplest and most typical type of business structure is a sole proprietorship, which is an unincorporated company held by one individual. We’ll walk you through the procedures in this post so that you can establish a single proprietorship in New York City.
Select a business name in the first step. You must select a company name that has not previously been registered with the state before you may launch a sole proprietorship in NYC. You can do this by searching the business name database maintained by the New York State Division of Corporations. You can register the name you choose as a business name if it is available.
Step 2: Obtain All Required Licenses and Permits Most businesses in New York City must have a general business license in order to operate legally. However, if they do business under their own name, single owners might not require a separate business license. You should confirm whether you require a license or permission to run your business by contacting the New York City Department of Consumer Affairs.
Step 3: Register for Taxes
If you operate a business as a sole proprietor, you are liable for paying taxes on your profits. To use while submitting your taxes, you must receive a Federal Employer Identification Number (EIN) from the Internal Revenue Service (IRS). To collect sales tax, if necessary, you’ll also need to register with the New York State Department of Taxation and Finance.
Step 4: Recommended but Optional Steps There are a few more measures that single owners may want to think about, while they are not required. For instance, setting up a separate bank account for your business can make it simpler for you to manage your accounts and file your taxes. To safeguard your private assets in the event of a lawsuit, you might also want to think about getting liability insurance. Do Sole Proprietors in New York Need a Business License? As was already established, in New York City, sole proprietors who conduct business under their own name might not require a separate business license. To operate legally, you might need to seek a permit or license if you intend to do business under a different name or in a sector that is subject to regulation. Is Owning a Business as a Sole Proprietor Expensive? A sole proprietorship typically costs less to start and run than other business types. To establish a distinct legal business, there are no costs required, and your tax requirements are rather simple. However, you could have to pay for licenses, permits, and liability insurance if you decide to get it. Which is preferable, a sole proprietorship or an LLC? Your specific situation will determine whether you create an LLC or operate as a sole owner. The simplest and least expensive business structure is a sole proprietorship, but an LLC offers extra liability protection and might be more appealing to outside investors.
Is a Sole Proprietorship Required to Be Registered? While registering a sole proprietorship with the state is not required, you might need to do so in order to be able to lawfully conduct business. Every business owner, including single proprietors, must also take the appropriate steps to obtain an EIN and file taxes.