Here’s an overview of the key steps you’ll need to take to start your own business in New York.
The most common legal structures for a small business are:
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.
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.
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:
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.
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.
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.
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.