Does a Sole Proprietor Need to Register in Hawaii?

A Hawaii sole proprietorship exists as a business owned by a single individual. Hawaii sole proprietors are not required to complete paperwork to start the business. However, owners of the business have to register with the Hawaii Department of Taxation for tax purposes.

A sole proprietor in Hawaii forms the business automatically when she decides to go into business. The business automatically assumes the same personal name as the business owner, since a sole proprietor and her business are treated as the same entity. This means sole proprietors in Hawaii have unlimited liability for judgments, debts and obligations that may arise while operating the business. Hawaii sole proprietors may lose their homes, automobiles and other personal assets as a result of business debts that may accumulate during the life of the company.

A sole proprietor in Hawaii has the option of using his personal name for business or he may use a trade name, also known as an assumed business name. Hawaii sole proprietors that wish to use a trade name must complete an application for registration of trade name, also known as Form T-1, and submit it to the Hawaii Department of Commerce and Consumer Affairs.

The name and address of the sole proprietor must appear on the trade name application, along with the nature of the company’s activities and the proposed trade name. A trade name is valid for five years in Hawaii and can be renewed upon expiration of the five-year period. As of 2020, it costs $25 to file a trade name application with the Hawaii Department of Commerce and Consumer Affairs.

Hawaii sole proprietors must complete Form SS-4 with the Internal Revenue Service to obtain an employer identification number. Every sole proprietor in Hawaii with employees must acquire an EIN. Sole proprietors in Hawaii have the option of using their social security numbers for business, as long as they do not have individuals working for the business.

The easiest way to get an EIN is to call the IRS Business and Specialty Tax Line at 800-829-4933 or apply online using the IRS website. The business owner must supply her name, social security number, personal and business address, and a description of business activities. The IRS will assign an EIN to the Hawaii sole proprietor at the conclusion of the online or telephone interview.

Sole proprietorships in Hawaii must register for state taxation by completing and filing a basic business application, also known as Form BB-1, with the Hawaii Department of Taxation. The business owner must indicate if she sells cigarettes, fuel, liquor and other goods. The trade name, EIN, date when the business came into existence and the location of the proprietorship must appear on the application. The cost to file Form BB-1 varies based on the nature of the sole proprietor’s business activities.