There are a number of different ways that New York residents can choose to structure their businesses and a variety of factors that should be considered to determine what structures are best for their use. If more than one person will be involved in the business, a partnership may be appropriate for its establishment. If only one person will start and operate an entity, then a sole proprietorship may work for them.
A sole proprietorship is a simple business structure. A business that is set up as a sole proprietorship must have a unique name and it must be fully permitted and licensed to do the work that the owner intends to do. However, unlike other business structures, sole proprietorships do not have to be registered with the state.
A sole proprietorship is connected to its owner, so the owner is not shielded from liability if the sole proprietorship cannot pay its debts. In other words, if a business set up as a sole proprietorship cannot pay its loans and incurs liabilities for its delinquencies, the business owner can be held personally responsible for those debts.
There are advantages to setting up businesses as sole proprietorships. Tax obligations for them are relatively straightforward, and sole proprietorships can be turned into different business structures if they grow or have plans to expand. As with all business structure and business law matters, it is important that readers seek the help of knowledgeable legal professionals. Individuals who work in this field of law can advise their clients on what business structure options may serve their needs and provide their new entities with opportunities to grow.