How to Start a Business in New York


Steve Goldstein
Steve Goldstein
Business Formation Expert
Steve Goldstein runs LLCBuddy, helping entrepreneurs set up their LLCs easily. He offers clear guides, articles, and FAQs to simplify the process. His team keeps everything accurate and current, focusing on state rules, registered agents, and compliance. Steve’s passion for helping businesses grow makes LLCBuddy a go-to resource for starting and managing an LLC.

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Start a Business in New York

Starting your own business in New York is one of the most exciting and profitable things you can experience. But where do you begin? There are numerous strategies to establish a business, each with important factors to consider. If you wish to start a business in New York, there are many things that you should consider. Doing business in New York, popularly known as The Empire State, will give you many opportunities because of the current estimated population, which consists of 20,448,194. Considering the large numbers, you will cater to a lot of customers.

Follow our in-depth guide on how to start a business in New York. We will help you remove the doubt from the process and explore your chances of success. It will start from defining your business idea to establishing, launching, and expanding your business. And we will guide you every step of the way.

How to Start a Business in New York?

To form a business in New York, you must follow a few steps that include creating a business plan, choosing a business entity type, determining your New York business costs, naming your business, registering a business, and lastly, marketing your New York business. Starting a business is not something you can do overnight. The processing, planning, and preparation take a lot of time. If you want to start a business in New York, you must have everything ready beforehand.

Continue reading to learn more about the procedure as a whole and what new small business owners should keep in mind as they carry out each phase.

Step 1: Create a Business Plan

The first thing you need to start your business is a solid plan. In creating a business plan, you should consider many things when you are in the decision-making phase. Your business plan in New York is a road map for your successful business.

A business plan should consider the detailed purpose of your business. You should know what product or service you will serve in New York. A purposeful business plan is important because that plays a key role in knowing how your business will make a profit. If the purpose of the business plan is vague and not aligned with what service you are giving, it will affect the business you are forming. Make sure to be SMART (specific, measurable, achievable, realistic, and in a certain timeframe) with your business goals. Also, researching your competitor’s service is a great deal to knowing what strategy you will form for your New York business. And lastly, you should include the funding of your business.

A business plan should be created before you start a business. Without it, you have nothing but a blank slate. This document will help you understand the key parts of your business and the plan for success. Regarding the potential funding for your business in New York, you can avail of business loans in bank and investor funding.

You can continue working on the legal structure of your business once you have the whole plan in your possession. You may create an LLC for your business legally. You can check other business guides shared by the LLCBuddy Editorial Team.

Step 2: Choose a Business Entity in New York

A business entity refers to a legal structure formed to conduct business activities. It is a separate and distinct organization recognized by the law, which possesses rights, responsibilities, and liabilities distinct from its owners or members. Choosing a business entity for your New York business is significant.

You must decide on a business entity structure while beginning your own business. The form of company entity you choose will significantly impact how well your personal assets are protected, how much tax you pay, and how much paperwork you have to deal with. You should consider forming a business entity in New York through having Sole Proprietorship, LLC, LLP, and Corporation.

Sole Proprietorships

A sole proprietorship is a simple and common type of business structure where an individual owns, operates, and manages the entire business. It is the easiest and least expensive form of business organization to establish and maintain. One of the most appealing aspects of a sole proprietorship is the owner’s direct control over all aspects of the business.

A key characteristic of a sole proprietorship is that the owner and the business are considered a single legal entity. This means that all profits, losses, assets, and liabilities are the owner’s personal responsibility. Although this can lead to increased risk exposure, it allows the owner to control their business operations completely.

Consider a sole proprietorship if you want to start a business in New York by yourself. For legal and tax reasons, the owner and the business are regarded as one and the same. The business owner takes on liability for the business. Therefore, the owner is liable for all business debts in the event that the company fails.

Limited Liability Company

A Limited Liability Company, also known as an LLC, is a business structure ideal for entrepreneurs and start-ups. It is perfect for start-ups and aspiring entrepreneurs since it has limited liability issues for a company. The New York LLC is mainly used for the legal structure of a business between two or more companies that share management and profits. It also protects its owners from liabilities, debts, and responsibilities that may cause them in the future.

LLCs offer pass-through taxation, meaning that the profits and losses flow through to the members’ personal tax returns, avoiding double taxation that corporations may experience. Additionally, LLCs have fewer formal requirements and administrative burdens compared to corporations. Read New York classification of LLC tax to get more information about tax.

Another advantage of an LLC is the flexibility in the management structure. Members can choose to manage the company themselves or appoint managers to oversee the business operations. This allows for customization based on the unique needs and preferences of the owners.

Limited Liability Partnership

Limited Liability Partnerships (LLPs) are a unique business structure combining partnerships and corporations’ elements. An LLP offers limited liability protection to its partners, meaning that each partner is only responsible for their actions and debts rather than jointly and severally liable for the entire partnership’s obligations.

This structure is particularly popular among professional service providers such as lawyers, accountants, and architects, as it allows them to maintain the collaborative nature of a partnership while enjoying the liability protection typically associated with corporations.

In an LLP, each partner’s income is subject to self-employment taxes, and the profits and losses are passed through to the partners’ personal income tax returns, similar to a general partnership. This pass-through taxation avoids the double taxation issue faced by some corporations.

Corporation

Forming a New York corporation reduces your personal liability for business debts as an LLC does. A corporation can be taxed as an S-corporation (S-Corp) or a C-corporation (C-Corp). If a small corporation satisfies certain Internal Revenue Service (IRS) standards, then S-corporation status is available, providing pass-through taxation. However, most larger businesses and startups seeking venture financing are taxed as C-corps.

Step 3: Determine your New York Business Costs

In New York, you should determine the business costs that you will form. You should consider paying the Articles of Organization fee for LLCs, Certificate of Incorporation fees for corporations, business licenses fee, office supplies and equipment, payroll, office rent, utilities, transportation, and taxes.

Usually, filing an initial New York Articles of Organization fee costs $200 (by mail and online), while the annual fee costs $4.50 in New York. Read about the overall cost of LLC registration in New York cost to know more about New York LLC cost. If you wish to know more about how much it costs to form an LLC, you should look up and be guided by the LLC formation costs. For a corporation, you must pay the $125 for filing online, or by mail.. Besides, you need to pay taxes as a corporation.

Step 4: Name Your Business in New York

Naming your business doesn’t take a lot of time. With the help of New York LLC name search, you can acquire a name for your business. If you form an LLC in New York, you must follow the below rules while naming your business-

  • The name should not be confused with a government entity.
  • The name should be unique.
  • The name should be available to use.
  • Any other business does not use the name.
  • The new name must include “LLC” if it is a limited liability company.

In New York, if you do not wish to file your business right away but want to hold the name that you have decided on, then you can reserve your business name for 60 days. You must file a name reservation application in the New York Secretary of State to keep the name. There is a complete guide on LLC name guidelines for you to have a proper LLC business name.

Step 5: Register Your Business in New York

In order to register a business in New York, you need to file it with the New York Secretary of State. Before that, you must have a New York Resident Agent for your business. The Resident Agent is a person who is responsible for receiving important legal documents on your behalf.

Get the New York Resident Agent

You must get your New York Resident Agent before you file your business. The person should be eligible to conduct business in New York. Also, they must be aged above 18 years. You can be your own registered agent. However, that will not be a wise decision. Appointing a professional will be much more beneficial for your business than doing it on your own.

Apply For New York Formation Document

After you have a Resident Agent, you need to file the New York formation document. If you are filing an LLC in New York, you must file the Articles of Organization and if you want to have a corporation structure, you need to file the New York Certificate of Incorporation.

Request For an EIN

In addition to the paperwork, you should apply for an Employer Identification Number (EIN). An EIN will serve as the tax ID for your professional corporation. EIN can be obtained from the Internal Revenue Service (IRS). It is a 9-digit number similar to Social Security Number. EIN, however, is distinct from SSN. It is only used for business-related activities, particularly for submitting general taxes. The form must be completed and uploaded to the IRS website. You can obtain the EIN for free from IRS.

The application of an EIN in New York can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is 4 weeks.
  • Apply by Telephone (for International Applicants)– International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

After you have your EIN number, you can benefit in a number of ways. It will give your LLC the final advantage necessary to operate at full capacity without encountering legal or judicial issues.

Step 6: Apply for Business License and Permit

Obtaining a business license and operating permit is necessary to run any business in New York. Before launching your new business, you should request any required business license or permission. Most New York businesses need licenses or permits to operate. Federal, state, and local governments may all require businesses to have licenses and permits. The business license fee depends on the type of license you are applying for. You must contact New York Department of State for more details.

Step 7: Get a Bank Account

Your business dealings in New York might be simpler with a US business bank account because it boosts your company’s legitimacy and liquidity. Most banks demand an EIN to create a business bank account for firms other than sole proprietorships. Also, keeping separate finances helps you avoid combining personal and professional finances.

Step 8: Market your Business in New York

Now that your New York business is already registered, you can market it with an ideal marketing plan. An ideal marketing plan can help a start-up business to become known. Making a comprehensive social media network like META, Facebook, Instagram, Twitter, and YouTube falls within this category. While creating an SEO campaign for your company website, you may also look at specialized communities on Facebook and LinkedIn.

Important Information

Do you need to have Business Insurance?

Your company needs insurance even if it’s a home-based business or you don’t have employees. Depending on your business planning and the risks you face, you may require different types of insurance. As your business expands, you might require more than one type of insurance. If you have employees, you are typically legally required to carry workers’ compensation insurance. You must contact New York State Department of Financial Services to ensure what type of insurance is required for your business.

What is the most profitable type of business?

The most profitable type of business will vary depending on a number of factors, including your industry, location, target market, and business strategy. However, some companies, such as those that provide expensive products and other services, tend to be more profitable than others. If you’re unsure about the kind of business to launch, think about your abilities and interests and the demands of your target market to guide your decision on an effective business.

FAQs

What is the best way to start a business in New York?
The best way to start a business in New York is to research the local market, create a business plan, register your business with the state, obtain any necessary licenses and permits, and determine your business structure.
What is the procedure for registering a business in New York?
In order to register a business in New York, you must file an application with the New York State Department of State. You will also need to obtain a business tax identification number from the New York State Department of Taxation and Finance.
What type of business should I start in New York?
The type of business you should start in New York depends on your interests, skills, and experience. Consider researching the local market and trends, as well as your competition.
Do I need a license to start a business in New York?
Depending on the type of business you are starting, you may need to obtain a license or permit from the New York State Department of State or the New York State Department of Taxation and Finance.
What are the tax requirements for businesses in New York?
Businesses in New York must register for a New York State Tax Identification Number. Depending on the type of business, additional taxes may be due, such as sales and use tax, payroll tax, and property tax.
What are the labor laws for businesses in New York?
New York labor laws require employers to comply with state and federal laws regarding minimum wage, overtime, child labor, and other labor regulations.
What type of insurance do I need for my business in New York?
The type of insurance you need for your business in New York will depend on the type of business you are running, as well as the risks associated with it. Common types of insurance for businesses include liability, property, and workers’ compensation insurance.
What is the process for obtaining financing for a business in New York?
The process for obtaining financing for a business in New York will depend on the type of financing you are seeking. Options include traditional bank loans, Small Business Administration (SBA) loans, angel investors, venture capital, and crowdfunding.
What is the process for hiring employees in New York?
The process for hiring employees in New York includes verifying the applicant’s identity and eligibility to work in the U.S., conducting background checks, and obtaining and verifying any necessary licenses or certifications. Employers must also comply with state and federal labor and wage laws.
What are the steps for opening a business bank account in New York?
The steps for opening a business bank account in New York include selecting a bank or credit union, providing the necessary paperwork, and obtaining a Federal Employer Identification Number.
What are the benefits of starting a business in New York?
Benefits of starting a business in New York include access to a large, diverse consumer base, access to a variety of resources and funding options, and access to a highly-skilled workforce.
What is Start a Business Today in New York?
Start a Business Today in New York is a comprehensive resource for entrepreneurs and prospective business owners in New York. It provides information on the legal and financial aspects of starting a business, as well as resources and support available from the state.
What types of businesses can be started in New York?
New York offers a wide range of business opportunities, from traditional brick-and-mortar stores to online platforms. Nonprofits, franchises, and various other business types can also be found in New York.
What permits or licenses do I need to start a business in New York?
The permits and licenses required to start a business in New York vary depending on the type of business you are starting. Some of the permits and licenses you may need include a business certificate, a sales and use tax permit, and a certificate of authority.
What taxes do I need to pay when starting a business in New York?
Depending on the type of business you start and the services you provide, you may be required to pay state and local taxes, such as income taxes, sales taxes, property taxes, and more.
What resources are available to help me start a business in New York?
The New York Business Development Corporation (NYBDC) and the Empire State Development Corporation both offer resources and support to entrepreneurs in New York. The Small Business Administration (SBA) also offers resources and assistance to small business owners.
How do I register my business in New York?
Registering your business in New York is a multi-step process. You will need to apply for a business certificate, obtain an employer identification number (EIN), and register for any applicable taxes or permits.
How can I find financing to start a business in New York?
There are several financing options available to entrepreneurs in New York, including traditional bank loans, small business loans from the SBA, grants from the NYBDC and other organizations, and crowdfunding.
What are the legal requirements for starting a business in New York?
The legal requirements for starting a business in New York may vary depending on the type of business you are starting. Generally speaking, you will need to form a business entity, obtain the necessary permits and licenses, and register with the state.
What types of insurance do I need to start a business in New York?
The types of insurance you need to start a business in New York will depend on the type of business you are starting and the services you provide. Common types of insurance include general liability insurance, workers’ compensation insurance, and professional liability insurance.
How do I hire employees for my business in New York?
When hiring employees for your business in New York, you should make sure to comply with all applicable laws and regulations, including those related to wages, benefits, and employee rights. You should also obtain any necessary permits or licenses for hiring employees.
How do I protect my intellectual property in New York?
To protect your intellectual property in New York, you should register it with the US Patent and Trademark Office or the US Copyright Office. You should also consider entering into nondisclosure agreements or other contracts with any parties who may have access to your intellectual property.
What are the requirements to start a business in New York?
In order to start a business in New York, you will need to register your business with the New York State Department of State, obtain a federal Employer Identification Number (EIN) from the IRS, and obtain any necessary permits or licenses from the city or county in which you will be operating.
What are the tax requirements for starting a business in New York?
All businesses in New York must register with the state’s Department of Taxation and Finance, and obtain a Tax Identification Number (TIN). Depending on the type of business, you may also need to register for additional taxes, such as sales tax or income tax.
What types of business structure are available in New York?
The most common types of business structure in New York are sole proprietorships, general partnerships, limited liability companies (LLC), and corporations. Each type has its own advantages and disadvantages, so it is important to consider which structure best meets the needs of your particular business.
How do I find financing for my business in New York?
There are a variety of financing options available to businesses in New York, including bank loans, venture capital, and grants. Additionally, the New York State government offers several programs to help businesses access capital, such as the Small Business Revolving Loan Fund, the New York Business Development Corporation, and the New York State Business Incubator Program.
How do I find business resources and support in New York?
There are a variety of resources and support available to businesses in New York, including local small business development centers, the Small Business Administration, and the New York State Small Business Development Center. Additionally, there are many online resources available, such as the New York Business Portal.
What regulations do I need to be aware of when starting a business in New York?
Depending on the type of business you are starting, you may need to comply with state and local regulations related to zoning, licensing, labor, taxation, and environmental protection. You should speak to a qualified business attorney to ensure that you are familiar with the specific regulations that apply to your business.
Are there any special incentives for businesses in New York?
Yes, the New York State government offers a variety of incentive programs to help businesses in the state. These programs may provide tax credits, grants, access to capital, and other forms of assistance.
What is the New York State Business Incubator Program?
The New York State Business Incubator Program is a program designed to provide resources, mentoring, and capital to entrepreneurs and small business owners. The program helps businesses access capital, connect with potential customers, and develop their business models.
What are the steps to forming an LLC in New York?
To form an LLC in New York, you must first file a Certificate of Formation with the New York State Department of State, and obtain the necessary permits and licenses for the LLC. You will also need to register with the Department of Taxation and Finance, obtain a Tax Identification Number, and appoint a registered agent. Finally, you must create an Operating Agreement and file the necessary annual reports.
How do I find a business mentor in New York?
There are a variety of resources available for finding a business mentor in New York, such as the New York Small Business Development Center, SCORE, and the New York Business Incubator Program. Additionally, you can search online for business mentorship programs in your local area.
What is the New York State Small Business Development Center?
The New York State Small Business Development Center is a network of local business assistance centers that helps entrepreneurs start and grow their businesses. The program provides resources such as business training, counseling, and access to capital.

Also Read

Why Start Business New York is So Important

One of the key reasons why starting a business in New York City is so crucial is the immense pool of talent that the city attracts. With a diverse population hailing from all corners of the globe, New York City is a melting pot of creativity, innovation, and expertise. There is no shortage of skilled professionals, experienced mentors, and potential collaborators in the city, making it an ideal environment for launching a business. The opportunities for networking and forging valuable connections are practically endless, providing new entrepreneurs with an invaluable resource that can propel their business to success.

Furthermore, New York City is home to a wealth of resources and infrastructure that is specifically geared towards supporting startups and small businesses. From co-working spaces and incubators to accelerators and funding opportunities, there are numerous avenues available for entrepreneurs to access the support and guidance they need to turn their visions into reality. The city is also well-connected to global markets, making it easier for businesses to scale and expand internationally.

In addition to the tangible benefits that New York City offers, there is also an intangible allure to starting a business in the city. The New York City entrepreneurial spirit is palpable – it is a place where dreams are chased, risks are taken, and ambitions are realized. The energy and vibrancy of the city create an atmosphere of endless possibilities, inspiring and motivating entrepreneurs to dream big and aim high.

Moreover, establishing a business in New York City opens doors to a diverse customer base and a robust market that is constantly evolving and growing. With a population of over 8 million residents and millions of tourists annually, businesses in the city have the opportunity to reach a wide and varied audience. The cosmopolitan nature of New York City ensures that businesses can cater to a broad range of tastes, preferences, and demographics, creating lucrative opportunities for growth.

Finally, starting a business in New York City is not just about financial success – it is also about making a lasting impact and contributing to the city’s vibrant and dynamic landscape. As one of the most iconic and influential cities in the world, New York City has a reputation for fostering creativity, innovation, and progress. By launching a business in the city, entrepreneurs have the chance to be a part of this legacy and shape the future of the business world.

In conclusion, starting a business in New York City is a strategic and essential move for any entrepreneur looking to make their mark on the world. With its wealth of resources, talent, infrastructure, and opportunities, the city provides a fertile ground for new businesses to thrive and succeed. It is not just a location, but a symbol of ambition, innovation, and endless possibilities.

Conclusion

In conclusion, embarking on the entrepreneurial journey of starting a business in New York, also known as The Empire State, requires thorough research, planning, and dedication. Understanding the local business landscape, choosing the right structure, and complying with all regulatory requirements are essential steps to ensuring your venture’s success. This article has provided valuable insights and guidance for aspiring entrepreneurs looking to seize the opportunities present in New York’s dynamic economy. By leveraging available resources and approaching the process with diligence and determination, you can lay the foundation for a thriving and prosperous business in New York.

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