Becoming a Sole Proprietor in New York

Here is an outline of the steps you should follow to get started as a sole proprietor in New York. You should also read the general section for information applicable in any state.

1. Choose a business name for your sole proprietorship and check for availability.

2. Register the business name with local, state, and/or federal authorities.

  • If you will be operating your sole proprietorship under a name that is different from your own name, then you will need to file that name with the county clerk of the county where your business is located. The specific form used to register your assumed name may vary slightly from county to county; contact the relevant county clerk to verify which form is used.
  • Although you are not required to do so, you should consider registering your business name as a federal and/or state trademark. Please see the Trademark for Business Naming section for details.

3. Obtain any required local licenses.

4. Determine what tax and other regulatory obligations your sole proprietorship has, and take care of any necessary registrations.

  • If you have an employee or employees, you need to apply for an Employment Identification Number from the IRS. You can apply for an EIN online. You may apply for an EIN even if you have no employees. Doing so may make it easier to open a bank account and reduce your risk of identity theft. There is no filing fee.
  • Whenever you hire an employee in New York, you must inform both the IRS and the State of New York. You can find details of all the necessary steps, including verifying work eligibility and withholding allowances, on the Hiring Employees section of the IRS website. You can find state-level information on reporting new hires at the New York New Hire Home Page.
  • As a small business owner or employer, there may be other informational returns that you have to file annually or semi-annually with the IRS. For more information, take a look at the IRS Guide To Information Returns.
  • If your business is located or does any business in New York City, you may be subject to the NYC Unincorporated Business Tax. This tax mainly applies if you have at least $75,000 in gross revenues or $35,000 in profits. For more information, see New York City Taxes.

5. Open a bank account for your business.

  • It is a good idea to keep your business's finances separate from your personal accounts. A good way to do this early on is by opening a bank account for your business. The bank will probably require your Social Security Number or EIN and a copy of your business name filing, although you may not need any documentation if your business's name includes your surname. (Here is an example of what banks may require.)
 

Last updated on January 12th, 2012

   
 
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