Start Your Own Business in New York: Seven Steps You Need to Take

From licenses and permits to taxes and insurance, learn what you need to do to start a business in New York.



Here’s an overview of the key steps you’ll need to take to start your own business in New York.

Step 1. Decide on a Legal Structure

The most common legal structures for a small business are:

  • sole proprietorship
  • partnership
  • limited liability company (LLC), and
  • corporation.

There also are special versions of some of these structures, such as limited partnerships and S corporations. You’ll want to consider which business entity structure offers the type of liability protection you want and the best tax, financing, and financial benefits for you and your business. Check  Choose Your Business Structure  on Nolo’s website for more information on how to choose the best ownership structure for your business.

Step 2. Choose a Name

For LLCs and corporations, you will need to check that your name is distinguishable from the names of other business entities already on file with the New York Department of State (DOS). You can check for available names by searching the  Corporation & Business Entity Database  on the DOS website. You can reserve an available name for 60 days by filing an  Application for Reservation of Name  with the New York DOS (there are separate forms for LLCs and corporations). There are certain name requirements for LLCs and corporations (like including a word such as “LLC” for LLCs or “Company” for corporations). See  How to Form an LLC in New York  and  How to Form a Corporation in New York  for more information.

Does your New York sole proprietorship or general partnership use a business name that is different from the name of the business owner (sole proprietorship) or names of the partners (general partnership)? If so, you must file a fictitious name certificate with the county clerk in the county where you will do business.

If you plan on doing business online, you may want to register your business name as a domain name. See  Choose and Register a Domain Name  for more information. In addition, to avoid trademark infringement issues, you should do a federal and state trademark check to make sure the name you want to use is not the same as or too similar to a name already in use. See  How to Do a Trademark Search  for more information.

Step 3. Create Your Business Entity

  • Sole proprietorship:  To establish a sole proprietorship in New York, you don’t need to file any organizational documents with the state. For more information, see  How to Establish a Sole Proprietorship in New York.
  • Partnership:  To create a general partnership in New York, you don’t need to file any organizational documents with the state. Although not legally required, all partnerships should have a written partnership agreement . The partnership agreement can be very helpful if there is ever a dispute among the partners. For more information, see  How to Form a Partnership in New York.  To form a  limited liability partnership(often used by professionals), you must file a Certificate of Registration with the New York DOS. For more information, see  How to Form a Limited Liability Partnership in New York.
  • LLCs:  To create an LLC in New York, you must file  articles of organization  with the New York DOS. You must also publish the articles of organization within 120 of filing. You will also need to appoint a  registered agent  in New York for service of process. In addition, while not required by law, you also should prepare an  operating agreement  to establish the basic rules about how your LLC will operate. The operating agreement is not filed with the state. For more information, see  How to Form an LLC in New York  and  How to Form a Professional LLC in New York  (for professionals).
  • Corporations:  To create a corporation in New York, you must file a  certificate of incorporation  with the New York DOS. You will also need to appoint a  registered agent  in New York for service of process. Although not legally required, you also should prepare  bylaws  to establish your corporation’s internal operating rules. Bylaws are not filed with the state.  S Corporations  must also file IRS Form 2553,  Election by a Small Business Corporation,  with the IRS. For more information, see  How to Form a Corporation in New York.

Step 4. Licenses and Permits

Tax Registration.  If you will be selling goods in New York, you must register with the New York Department of Taxation and Finance (DTF) as a sales tax vendor. You can file on paper using  Form DTF-17. If you will have employees in New York, you must register with the New York Department of Labor (DOL) for employer withholding tax. You can register online at the DOL’s  Employer Registration  webpage or on paper using  Form NYS-100.

EIN.  If your business has employees or is taxed separately from you, you must obtain a federal Employer Identification Number (EIN) from the IRS. Even if you are not required to obtain an EIN, there are often business reasons for doing so. Banks often require an EIN to open an account in the business’s name and other companies you do business with may require an EIN to process payments. You can get an EIN by completing an online application on the IRS website. There is no filing fee.

Regulatory licenses and permits.  These cover areas such as:

  • health and safety
  • the environment
  • building and construction; and
  • specific industries or services.

The New York State  License Center  lists the various licenses issued by the state, including many related to businesses. Click on the Center’s link for the Business section for more information. The site also links to the state’s online  Business Wizard, where you can enter details about your specific business and automatically generate a list of the licenses and permits you’ll need. You may also need to get business licenses at the local level. For example, New York City has its own  Business Wizard  website.

Professional and occupational licenses. These cover people who work in various fields. The state makes a limited distinction between professions and occupations. You can get information on licensing for most professions from theOffice of the Professions  (OP), which is a division within the New York State Education Department (NYSED). The New York DOL has a section of its website  listing dozens  of state-licensed occupations as well as professions.

Step 5. Business Location and Zoning

You’ll need to pick a location for your business and check local zoning regulations. That includes if you work from home. You may be able to find zoning regulations for your town or city by checking  municode.com.

Step 6. Taxes and Reporting

New York taxes every kind of business. See  New York State Business Income Tax  for more information on state business taxes in New York.

Sole proprietorships.  Pay state taxes on business income as part of their personal state income tax returns.

Partnerships.  Partners pay state taxes on partnership income on personal tax returns. In addition, many partnerships also must file  Form IT-204,  Partnership Return. Furthermore, some partnerships also must pay an annual state filing fee.

LLCs.  Members pay state taxes on their share of LLC income on personal tax returns. In addition, most LLCs also must pay an annual filing fee and file  Form IT-204-LL,  Partnership, Limited Liability Company, and Limited Liability Partnership Filing Fee Payment Form. Furthermore, most LLCs also must file  biennial statements. See  New York LLC Annual Report and Tax Requirements  for more information.

Corporations.  Shareholders must pay states taxes on their dividends from the corporation. A shareholder-employee with a salary also must pay state income tax on his or her personal state tax return. Moreover, the corporation itself is subject to New York corporation taxes and a franchise tax. Note: New York’s taxation of corporations  is particularly complicated. Finally, most corporations must file a  biennial statement  with the New York DOS.

If you have employees, you must also deal with state  employer taxes.

And, apart from New York taxes, there are always federal income and employer taxes. Check IRS Publications 334,Tax Guide for Small Business, and 583,  Taxpayers Starting a Business, available at irs.gov.

Step 7. Insurance

Insurance is a good idea for most kinds of business. While insurance often is regulated at the state level, the types of business insurance available are usually similar across the fifty states. Check  Obtaining Business Insurance  for more information.

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