How to Start a Sole Proprietorship in New York

By Jeffry Olson, J.D.

How to Start a Sole Proprietorship in New York

By Jeffry Olson, J.D.

A sole proprietorship is the easiest form of business to launch in the State of New York. Simply opening your doors and starting business operations in the Empire State results in a sole proprietorship by default. Like any business venture, certain state requirements must be met first and making sure you've met them all will increase the likelihood of success and longevity for your new business.

Businessman crossing arms in suit

Starting a Sole Proprietorship in New York

Like any new business venture, a sole proprietorship in New York must follow certain steps outlined by the state. Here's what you need to do to get your New York-based business off the ground.

1. Select a business name.

Selecting a name for the business is the first step in starting a sole proprietorship. Using some form of your own name is an option that does not require government approval. For example, if your name is John Smith, starting "John Smith Enterprises" requires no further filing with the county.

However, if you would like to start a business with a name different than your own, you must file a Certificate of Assumed Name with the county clerk where your business is located and pay a filing fee. Filing the Certificate of Assumed Name allows customers and the state to identify the person behind the business. In addition, the name you choose must not be the same as or too similar to a business already operating in your county, helping avoid confusion.

2. Form the sole proprietorship.

No formal filing or registration with the State of New York is required when you're starting a sole proprietorship there. The Empire State does not view an individual operating a sole proprietorship any differently than an individual operating a business in his or her own name.

If your business plans to hire employees, you must obtain an employer identification number (EIN) from the U.S. Internal Revenue Service. You can apply for an EIN by phone, by mail, or online.

Sole proprietorships not intending to hire employees may also obtain an EIN. This allows you to obtain credit in the name of your business and can simplify the process of opening a bank account. Opening a bank account with an EIN will help you keep your business and personal finances separate. It will also make filing taxes much easier because it helps keep your business and personal finances separate.

3. Meet licensing and tax requirements.

Depending on the nature of your business, you may need to meet state and local licensing requirements. The State of New York does not require a license to operate a sole proprietorship, however, some professions require state licensing. These include legal, insurance, and banking businesses, for example.

Some cities in the state require a license to operate. Check with your city to make sure your business is in compliance.

Depending on the nature of your business, your sole proprietorship may need to collect state sales taxes. Apply for a Certificate of Authority to collect sales and use tax if appropriate. Check for other local, state, and federal tax requirements for your business. In New York, it's easy to launch a new business on a whim as a sole proprietor. Before you get going, you should make sure you've followed all state and local requirements.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.