Many businesses are making their mark online rather than in a physical store or location. Starting an online business can be a cheaper alternative than starting a store, for example. New York Small Business Law specifies that an online business is the same as any other type of business in terms of the licenses and permits required to operate in New York. While the operation of the business is different online, the practical steps for opening an online business in New York are the same as any other type of business.
Read through the different types of business structures found on the Better Business Bureau website, newyork.bbb.org. Choose the business structure that suits your business needs. For example, if you are working alone, the sole proprietor structure is ideal, while the LLC or partnership is ideal for those working together on a business. Read through each structure and decide which one fits your business best.
Register your online business with the New York Secretary of State, if you are running a business structure other than the sole proprietor. Sole proprietors are not required to register on a federal level, but should register at a local level with the county. Despite being an online business, you still need to register as you will be making money from the business.
Contact the IRS office in New York to obtain your employer identification number (EIN). You will need this despite being a sole proprietor, as this number is needed to pay your business taxes and identify your business in the IRS system. You must fill out the SS-4 form issued by the IRS to apply for the EIN.
Contact the New York Department of Revenue to register for your business taxes. As an online business, you will most likely be selling products or providing a service. Products and certain services are subject to sales and use tax, along with common business taxes, such as withholding tax. Since taxes depend on the type of business you are running, ask the Department of Revenue for clarification on which taxes apply to your online business.
Obtain the proper permits and licenses to legally run your online business. Permits and licenses are issued by both the state and the local county, depending on what type of business you are running. The permits also differ between providing a service or selling a product. Use the Online Permit Assistance and Licensing, or OPAL, site to find out what permits and licenses pertain to your type of business. Contact the New York State Department of State Division of Licensing Services if you are looking for federal licenses and permits and the New York City Department of Consumer Affairs if you are looking for local permits and licenses for New York City. You are now ready to start operating your online business legally.