Learn How to Form a New York LLC or a Corporation

New York Business Facts and Environment

NY Business Facts

New York is known as The Empire State, due to its wealth and rich collection of resources. New York itself was named for the Duke of York in 1664.

The official bird of New York State is the bluebird, and its official flower is the rose.

New York’s economy is the third largest in the country, with a gross state product of $1.44 trillion. It is outranked by California and Texas. If it were a country, it would rate as the 12th or 13th largest economy in the world.

New York City is one of the world’s largest center of finance, and is home to the New York Stock Exchange and NASDAQ. The greater Manhattan area is the US’s leading center of banking, finance, media, and telecommunication.

With a population of an estimated 8.5 million, New York City has a reputation as a melting pot, and is one of the most diverse cities in the United States.

New York Business Statistics

New York State is home to 2.1 million small businesses, many of them being women-owned, making up 99% of the state’s business population. They employ 4.4 million employees, approximately 50% of New York’s working population. New York is home to more Fortune 500 companies than any other state.

Major Companies in New York

JPMorgan Chase, IBM, PepsiCo, Verizon, and Pfizer are among the largest companies in the state of New York.

New York Startup Environment

Home to a diverse population, a massive collection of major corporations, a tight-knit business community, and an immense amount of startup capital, New York’s startup community is arguably one of the best in the country. It’s a particularly valuable location for anyone looking to start a business that’s involved in financial services, media, or communication. One note of caution, though – New York is known for its fast-paced business environment.

Step 1: Decide on a Business Structure

There are 3 basic options: a DBA, a Corporation or an LLC. Click here to learn more about business entities.

• A DBA or “Doing Business As” (also known as a “Fictitious Business Name” or FBN) is not really a separate structure, but just a different name that an individual or partners use as their business name.
• A Corporation is a separate entity (provides liability protection to the owners) that has a structure that includes shareholders, directors and officers. More complex than a DBA but the entity of choice for large companies and startups that intend to raise funding. Some professions are required to choose what is known as a “Professional Corporation” or PC (doctors, lawyers, architects, etc.).
• An LLC or “Limited Liability Company” is a newer type of business that is both a separate entity but provides very easy management (doesn’t require directors or officers) and taxation. Has largely replaced the DBA and Corporation in popularity recently as it provides liability protection but with much less complexity (and taxation) than a Corporation.

Step 2: Pick a Business Name

Picking a business name is easier said than done – many legal and business problems can arise from picking the wrong name (you can always change it later but the less times you have to do that, the better).

• Make sure you’ve covered the basics: unique, easy to understand/pronounce (practice saying it out loud: “Thanks for calling XYZ”) and can survive over time (“DVD World” is not timely). Here are some of our tips on business identity including logo and trademarks.
• Search the web for your proposed name. Search Google, Bing and DuckDuckGo as a “first sweep” for any potential conflicts, especially in your state or local jurisdiction. NOTE: If you intend to operate nationally or even internationally it will be even more important that your name be unique. This should cover many cases where a company name is being used but not officially trademarked (see next tip).
• Do a trademark search with the US Patent and Trademark Office (USPTO). This will be a very good indicator if you’re name will have any conflicts. There’s an art to trademark searches (trademark specialists will charge you handsomely to do a thorough search) but in our experience if you can use google at a fairly advanced level you can reasonably clear a name yourself.
  
  TIP: search misspellings, plurals, variations of spelling, sound-alikes and other versions of your chosen name to be sure it’s not already registered.
  
  
• Make sure your company name choice is available by searching the New York Business Entity Database and doing a name search on the State of New York website. Note: Make sure to search variations of spelling, plurals and misspellings as the state may reject a name that is too similar (then you have to start all over again, wasting valuable time).

Step 3: Register the Business

Each state has it’s own requirements for registering a business. Now that you’ve chosen a business structure and picked your business name, here are the requirements to register your business in New York.

How to form an LLC in New York

• Optional: Choose a Registered Agent Service: In New York, the Secretary of State acts as the registered agent by default, though you may choose to use an alternative service.
• File the “Articles of Organization” with the New York Division of Corporations. Note that your LLC must be published in 2 newspapers within 20 days of formation.
• Hold an Organizational Meeting to take contributions from the members, issues Member Certificates, adopts the company Operating Agreement and more. (yes, even for 1 person LLCs).
• Optional: Elect S-Corporation status with the IRS by filing IRS Form 2553. Yes, even an LLC can choose to be taxed as an S-Corporation (or even a C-Corporation).
  
  TIP: Speak to your tax advisor about this important issue because it adds complexity to your LLC most people would rather avoid.

How to Incorporate in New York

• Optional: Choose a Registered Agent Service: In New York, the Secretary of State acts as the registered agent by default, though you may choose to use an alternative service.
• File the “Articles of Incorporation” with the New York Division of Corporations.
• Optional: Corporations can elect S-Corporation status with the IRS by filing IRS Form 2553. Click here to learn more about S-Corporations.
• Hold an Organizational Meeting to properly organize the corporation, take contributions from the shareholders, elect directors and officers, issues stock, adopts the Corporate Bylaws and more.

How to File a DBA in New York

New York requires a company use its true legal name to conduct business – any company seeking to use a name other than its legal name must file for a DBA.

• Check your business name by calling the County Recorder or visiting their website (search for “YOURCOUNTY county recorder” should find it).
• Obtain a Certificate of Assumed Name. Note that if you are a corporation, limited partnership, or LLC, you must instead obtain a certificate complying with Section 130 of the General Business Law.
• File the forms with the County. The fee for filing is $25, plus any associated county’s fees. For corporations, the fee is $100 for each county within New York City, and $25 for each county outside.

Ready to Start Now? Let Us Do The Work

Sure, you could do all the steps above or you could spend 5-10 minutes on our order form and let us take care of it while you work on more important things.

• Learn more about our business formation service
• Read our verified reviews and 100% Satisfaction Guarantee
• Contact our friendly support team if you have any questions

Step 4: Obtain Your Federal Employer Identification Number

Your EIN is like your Social Security Number for your company. It’s required for Corporations and LLC’s and optional for DBA’s (if you don’t have any employees, then it’s required). However, if you are a DBA and don’t obtain an EIN you will be forced to use your Social Security Number on many documents so it’s typically recommended you obtain the EIN to prevent identity theft.

To obtain an EIN you can apply online with the IRS or via IRS Form SS-4.

TIP: We will obtain your EIN for you if you we form your company.

Step 5: Open Company Bank and Credit Accounts

To keep business and personal expenses separate, you should open a separate account for your business. In addition, getting business credit cards is how you begin to build a company credit profile (corporation or LLC required) and can later qualify for larger loans and lines of credit. To open the account simply call your chosen bank and inquire on the steps to open a business bank account. Typically you’ll need a) your filed paperwork, b) your EIN and c) a company resolution authorizing your company to open the account (signed by the owners, members, officers or directors, etc.).

Click here to view a list of our recommended banks in our Vendor Network.

Top Business Banks in New York:

• Wells Fargo
• Chase
• Capital One
• Bank of America
• Cross River Bank
• Asia Bank
• Wilshire bank

TIP: Our business formation service includes a free banking resolution for your use.

Step 6: Set-up An Accounting System

Setup your Accounting and Record-keeping system and learn about the taxes your new company is responsible for paying.

Company documents generally are required to be kept for 3 years, including: a list of all owners and addresses, copies of all formation documents, financial statements, annual reports, amendments or changes to the company. All Tax and Corporate Filings should be kept for at least 3 years. View our “Accounting & Financial Management” section for help with setting up an accounting system and purchasing accounting software.

Review our list of Accountants, Accounting Software and Bookkeepers in our Vendor Network.

Step 7: Obtain Licenses and Permits

Now that you’ve registered your business name you need to obtain a business license for your company – this authorizes your company to do business in your city or county. Typically this also involves registering for state taxes and permits (the city may require them as part of the business licensing process).

TIP: We work with a company that can obtain and prepare business licenses and permits for you. Click here to learn more.

Step 8: Hire Employees (if applicable)

If you intend to hire yourself or others as a full or part-time employee of your company, then you may have to register with the appropriate State Agencies or obtain Workers Compensation Insurance or Unemployment Insurance (or both). View our “Employees & Payroll” section for help with hiring employees and processing payroll.

Review our list of recommended Payroll Providers in our Vendor Network.

Step 9: Obtain Business Insurance

There are many types of insurance for businesses but they are usually packaged as “General Business Insurance” or a “Business Owner’s Policy”. This can cover everything from product liability to company vehicles. A decent policy can run as little as $300/year and offers a great extra level of protection.

Click here to view our list of insurance providers in our Vendor Network.

Step 10: Systemize and Organize

Prepare the business as if someone needed to take it over and run it for you. This means have a method to process orders, pay bills, pay employees, pay taxes, maintain your permits, etc. Basically, try to make the operational aspect of the business as automated and efficient as possible so you can concentrate on growing your business. View our “Manage Your Company” section for help with systemizing and automating your business.

Step 11: Branding and Marketing

Now that you’ve set-up the company for success, you need to get the word out. Create a marketing plan for your products and services that targets your ideal customer. View our “Marketing & Sales” section for help for more information.

Step 12: Annual and Ongoing Requirements

DBA: Your Fictitious Business Name should be valid for 5 years (unless you change company name or other information listed on the FBN) at which point you’ll need to renew it with the county.

LLC: New York LLCs and corporations must file a biennial report during their anniversary month of incorporation.

Corporation: New York corporations must keep complete books and records of account at their principal place of business. These records must include minutes of all shareholder, executive, and director meetings, list the names and addresses of all shareholders, the number and shares of each, and the date each became a shareholder. LLCs and Corporations will pay a filing fee.

Franchise Taxes: New York businesses are required to pay an annual franchise tax based on several categories, outlined here.

Click here to view our MyCompanyWorks Premium™ service which can automate most or your ongoing compliance tasks.

Important New York Contacts

New York State Department of State

New York State Taxation Departments

New York Department of Taxation and Finance

NYS Division of Licensing Services

New York State Labor and Employment Departments

New York Division of Employment and Workforce Solutions

New York Startup Resources

1. New York Small Business Administration

• US Small Business Administration

2. SCORE Mentors

SCORE New York

SCORE is made up of active and retired business people who volunteer their time to support startup businesses. From coaching to funding resources, finding a local SCORE mentor can save precious time and money.

• New York Business Portal
• New York Small Business Development Center
• New York Department of Labor Employer Portal
• Tax Information For New York Businesses

3. New York State Legal Statutes:

• New York Business Corporation Laws
• New York State Limited Liability Companies – the specific act that applies to New York State LLCs.
• New York State Businesses and Professions – includes regulations on topics such as business and professions codes.

4. New York State Chambers of Commerce

5. New York Angel Investors

• List of Angel Investors in New York

6. New York Business News

• New York Business Journal
• Crain’s New York Business
• NBC New York Business

7. New York State Small Business Development Center

• New York Small Business Development Center

8. New York Green Business Initiative