How to Start a Business in New York (with Legal Templates!)

How to Start a Limited Liability Company (LLC) in New York - in 7 Easy Steps

LLCs can offer the liability protection of a corporation with the ease of use of a sole proprietorship, as well as various potential tax advantages. LLC owners are known as “members,” so a single member LLC has one owner, and a multi-member LLC has more than one owner. While LLCs are a common entity in New York, it’s worth noting that New York law does not offer LLCs the same level of protection from members' personal creditors as do many other states.

In most states, an LLC’s money or property cannot be taken by creditors to pay off the personal debts or liabilities of the LLC’s owners. Instead, creditors are limited to obtaining a charging order against the LLC, which requires repayment from the LLC’s profits or income. If the member is not due any profits or income, however, creditors are out of luck.

In New York, however, creditors have additional options to recover their money. In addition to a charging order, New York creditors may also foreclose on the debtor member’s interest in the LLC, and possibly force the LLC’s dissolution.

To form either a single or multiple member LLC in New York, you’ll need to:

Step 1. Select a business name for your LLC.

• For reasons of clarity, New York law requires that an LLC name contain the words "Limited Liability Company" or the abbreviation "L.L.C." or "LLC". Additionally, there are a number of specific words that cannot be included in the name without prior approval. See the full list at N.Y. Ltd. Liab. Co. Law § 204.

Step 2. Check to see if your business name is available.

• Your LLC’s name must be different from the names already in use by other business entities. The Department of State offers a searchable online database of the names already reserved.

• Because the online database might not be complete, you should also search for the availability of a proposed business name by writing to: Department of State, Division of Corporations, One Commerce Plaza, 99 Washington Avenue, Albany, NY 12231.

  • The written inquiry should state that you wish to determine the availability of a name, and list the name(s) you’re considering. The request must be accompanied by a $5 fee for each name to be searched.

Step 3. Prepare and file articles of organization with the Department of State.

• The articles of organization officially establish the LLC with the state of New York. Draft and send the completed articles to the Department of State with a $200 fee.

• New York articles of organization must appoint the Department of State as the registered agent for service of process. This means that the Department will accept and forward legal papers in the event the LLC gets sued. If you want, you can also appoint a New York individual resident, or a corporation or LLC as an additional agent.

Step 4. Publish a notice of LLC formation for six weeks, and then file a certificate of publication.

• To let everyone know you’ve started your business, you’ll need to publish a notice of formation in two different newspapers for six consecutive weeks. The newspapers must be located in the county where the LLC is primarily located; the local county clerk will designate which newspapers should be used.

• Once the notice has been published for six weeks in both papers, the newspapers will provide you with an affidavit of publication.

• When you receive the affidavits, attach them to a Certificate of Publication and file with the Department of State along with a $50 filing fee.

"There's a lot of bad reasons to start a company. But there's only one good, legitimate reason, and I think you know what it is: it's to change the world." - Phil Libin, CEO of Evernote

Step 5. Negotiate and execute a single member or multiple member operating agreement.

• An operating agreement sets out the internal policies and procedures for the LLC and is a legal requirement for your company to enjoy liability protections under New York law.

• You should execute the operating agreement either before or within 90 days of filing the articles of organization. The operating agreement does not need to be filed with the state. Because the operating agreement creates legally enforceable rights and obligations, it should be drafted and executed with the advice of an attorney.

• Single member LLC operating agreements are often more straightforward than multiple member LLC operating agreements, but no less important. Even if your LLC has only one member, you should still sign the operating agreement between yourself as an individual and the company, in order to maintain separation and liability protection.

• Most LLCs are member-managed, meaning the members handle daily operations. More complex LLCs sometimes prefer to designate a member or members as “managers,” or hire an outside manager to run the LLC’s affairs.

Step 6. Obtain any required local licenses.

• Check with your city and county governments for any additional licenses that may be required for your business.

Step 7. Determine tax and other regulatory obligations.

• Hiring an accountant is your best bet to ensure your LLC meets all tax-related requirements. Tax liability for LLCs varies based upon membership and source(s) of gross income so be sure your accountant is familiar with New York tax law.

• Depending upon what type of business you will be conducting and whether or not you have employees, you may need to request an Employer Identification Number (EIN) from the IRS or obtain workers’ compensation insurance.

Step 8. Open a bank account for your business.

• Keeping business finances separate from your personal accounts will help ensure you enjoy the full protection of your company’s limited liability. Banks often require your LLC’s Tax ID number (EIN) and a copy of the articles of organization in order to open a business bank account.

Additional Requirements to Maintain a New York LLC

• Every two years after the date of formation, New York LLCs must send a Biennial Statement along with a $9 filing fee to the Department of State.

• New York requires that LLCs keep certain documents at the principal place of business. The required documents list can be found at N.Y. Ltd. Liab. Co. Law § 1102.

Legal Templates for LLCs

• LLC Articles of Organization for New York

• Single Member LLC Operating Agreement for New York

• Multi-Member LLC Operating Agreement for New York

How to Start a C Corporation in New York - in 10 Easy Steps

• So that people know what type of business they’re dealing with, New York law requires that a corporation’s name include the word “Incorporated,” “Corporation,” “Limited” or, alternately, one of the following abbreviations: "Inc.," "Corp." or "Ltd." Further, there are a number of specific words that cannot be included in the name without prior approval. For a full list of prohibited words, see N.Y. Bus. Corp. Laws § 301.

Step 2. Check to see if your business name is available.

• To help prevent confusion, your corporation’s name must be distinguishable from the names of other business entities already registered in New York. The Department of State offers a searchable online database of the names already reserved.

• However, because the database might not be complete, you should also search for the availability of a proposed business name by writing to: Department of State, Division of Corporations, One Commerce Plaza, 99 Washington Avenue, Albany, NY 12231.

  • The written inquiry should state that you wish to determine the availability of a name and list the name or names to be searched. The request must be accompanied by a $5 fee for each name to be searched. Unfortunately, searching the availability of a corporate name does not guarantee you the name, only that it is available. (The certificate of incorporation, once filed, will reserve the name.)

Step 3. Appoint a director or directors for the corporation.

• Under New York law, a corporation must have at least one director. Directors need to be at least eighteen years old but do not have to reside in New York or be shareholders of the corporation, unless the corporation requires it in their bylaws or certificate of incorporation.

Step 4. Prepare and file a certificate of incorporation with the Department of State.

• The certificate of incorporation formally establishes the corporation with the state of New York. The Department offers online filing and the filing fee is $125, plus a minimum tax of $10 based upon the number of shares authorized in the certificate.

Step 5. Draft New York-specific corporate bylaws

• Bylaws are crucial--they are the rules which govern the corporation. Along with internal protocol and procedure, they set forth matters such as the existence of corporate offices, the size of and procedures for electing the board of directors, how and when shareholder meetings will be held, who may call meetings, and how the board of directors will function, among other items.

• Bylaws aren’t filed with any governmental agency but the corporation must keep a copy at its principal place of business.

• Having bylaws specific to your state of incorporation can help strengthen your liability protections, especially in the event of a dispute.

"Risk more than others think is safe. Dream more than others think is practical" - Howard Schultz, CEO of Starbucks

Step 6. Hold an organizational meeting.

• An organizational meeting is required to launch the corporation. Items on the agenda include adopting bylaws and electing directors to serve until the first shareholders meeting. New York law addresses organizational meetings at N.Y. Bus. Corp. Law § 404.

Step 7. Issue stock certificates to the initial owners (shareholders) of the corporation.

• Issuing shares formally divides up ownership interests and is required to qualify for corporate legal protections. New York law requires that stock certificates include a number of items, found at N.Y. Bus. Corp. Laws § 508.

Step 8. Obtain any required local licenses.

• Check with your city and county for local business licensing requirements. Many counties have a business licensing tax.

Step 9. Determine tax and other regulatory obligations.

• Hiring an accountant is your best bet to ensure that your corporation meets all tax-related requirements. These requirements may include an Employer Identification Number (EIN) from the IRS, New York employment tax registration, workers compensation insurance, and calculation of corporate income tax liability. Your accountant should be familiar with New York tax law as the state has a General Corporation Tax as well as a complicated corporate income tax structure.

Step 10. Open a business bank account.

• Business and personal finances should be kept separate to ensure your corporation and its shareholders enjoy full corporate legal protections.

Maintaining Corporate Status in New York

Once your corporation is up and running, you’ll have to file a Biennial Statement with the Department of Revenue and pay the $9 filing fee every 2 years in order to maintain corporate status. The Department of State mails the Biennial Statement to the address of the principal executive officer listed on the certificate of incorporation one month prior to its due date.

Legal Templates for C Corporations

• Certificate of Incorporation for New York

• Corporate Bylaws for New York

How to Start an S Corporation in New York - in 11 Easy Steps

*Note: An S corporation follows the same formative steps as a C corporation and shares the same basic organizational structure, but can offer some tax advantages similar to those of a partnership or LLC. An accountant can advise on the S corporation’s full range of benefits and detriments.

• So that people know what type of business they’re dealing with, New York law requires that a corporation’s name include the word “Incorporated,” “Corporation,” “Limited” or, alternately, one of the following abbreviations: "Inc.," "Corp." or "Ltd." Further, there are a number of specific words that cannot be included in the name without prior approval. For a full list of prohibited words, see N.Y. Bus. Corp. Laws § 301.

Step 2. Check to see if your business name is available.

• To help prevent confusion, your corporation’s name must be distinguishable from the names of other business entities already registered in New York. The Department of State offers a searchable online database of the names already reserved.

• However, because the database might not be complete, you should also search for the availability of a proposed business name by writing to: Department of State, Division of Corporations, One Commerce Plaza, 99 Washington Avenue, Albany, NY 12231.

  • The written inquiry should state that you wish to determine the availability of a name and list the name or names to be searched. The request must be accompanied by a $5 fee for each name to be searched. Unfortunately, searching the availability of a corporate name does not guarantee you the name, only that it is available. (The certificate of incorporation, once filed, will reserve the name.)

Step 3. Appoint a director or directors for the corporation.

• Under New York law, a corporation must have at least one director. Directors need to be at least eighteen years old but do not have to reside in New York or be shareholders of the corporation, unless the corporation requires it in their bylaws or certificate of incorporation.

Step 4. Prepare and file a certificate of incorporation with the Department of State.

• The certificate of incorporation formally establishes the corporation with the state of New York. The Department offers online filing and the filing fee is $125, plus a minimum tax of $10 based upon the number of shares authorized in the certificate.

Step 5. Draft New York-specific corporate bylaws

• Bylaws are crucial--they are the rules which govern the corporation. Along with internal protocol and procedure, they set forth matters such as the existence of corporate offices, the size of and procedures for electing the board of directors, how and when shareholder meetings will be held, who may call meetings, and how the board of directors will function, among other items.

• Bylaws aren’t filed with any governmental agency but the corporation must keep a copy at its principal place of business.

• Having bylaws specific to your state of incorporation can help strengthen your liability protections, especially in the event of a dispute.

"I'm convinced that about half of what separates the successful entrepreneuers from the non-successful ones is pure perseverance" - Steve Jobs, CEO of Apple

Step 6. Hold an organizational meeting.

• An organizational meeting is required to launch the corporation. Items on the agenda include adopting bylaws and electing directors to serve until the first shareholders meeting. New York law addresses organizational meetings at N.Y. Bus. Corp. Law § 404.

Step 7. Issue stock certificates to the initial owners (shareholders) of the corporation.

• Issuing shares formally divides up ownership interests and is required to qualify for corporate legal protections. New York law requires that stock certificates include a number of items, found at N.Y. Bus. Corp. Laws § 508.

Step 8. Obtain any required local licenses.

• Check with your city and county for local business licensing requirements. Many counties have a business licensing tax.

Step 9. Determine tax and other regulatory obligations.

• Hiring an accountant is your best bet to ensure that your corporation meets all tax-related requirements. These requirements may include an Employer Identification Number (EIN) from the IRS, New York employment tax registration, workers compensation insurance, and calculation of corporate income tax liability. Your accountant should be familiar with New York tax law as the state has a General Corporation Tax as well as a complicated corporate income tax structure.

Step 10. Open a business bank account.

• Business and personal finances should be kept separate to ensure your corporation and its shareholders enjoy full corporate legal protections.

Step 11. Ensure your business meets S Corp requirements and file IRS Form 2553

• Ensure your business meets and can maintain the requirements for S Corp status. These include being a domestic corporation, having no more than 100 shareholders, having only eligible shareholders (no corporations, for example), and having only one class of stock. Failure to maintain these requirements could lead to a loss of liability protection.

• Form 2553 designates "S" status for the purposes of taxation and must be filed within 2 months and 15 days of filing the Certificate of Incorporation. All shareholders must sign the form and state their percentage ownership.

Maintaining Corporate Status in New York

Once your corporation is up and running, you’ll have to file a Biennial Statement with the Department of Revenue and pay the $9 filing fee every 2 years in order to maintain corporate status. The Department of State mails the Biennial Statement to the address of the principal executive officer listed on the certificate of incorporation one month prior to its due date.

Legal Templates for S Corporations

• Certificate of Incorporation for New York

• Corporate Bylaws for New York

How to Start a Sole Proprietorship in New York - in 5 Easy Steps

When you’re looking to start a business in New York, a sole proprietorship doesn’t offer the liability protection of an LLC or corporation but is significantly easier to set up. Many entrepreneurs appreciate the flexibility and ease of a sole proprietorship but be aware that a sole proprietorship does not offer any liability protection, so your personal assets may be accessible in a lawsuit or claim against your business. If you’re looking to eventually obtain investors, you will most likely want to form an entity that offers some liability protections.

Step 1 Select a business name and check availability.

• Your sole proprietorship’s name must be distinguishable from the names of other business entities already registered in New York. Check the Department of State’s searchable online database of the names already reserved to make sure yours isn’t already in use.

• Because the database might not be complete, you should also search for the availability of a proposed business name by writing to: Department of State, Division of Corporations, One Commerce Plaza, 99 Washington Avenue, Albany, NY 12231.

  • The written inquiry should state that you wish to determine the availability of a name and list the name or names to be searched. The request must be accompanied by a $5 fee for each name to be searched.

Step 2 Register the business name with the local county clerk, if necessary.

• If you use your legal name as your business name, you don’t have to register because the owner of your business is obvious from the business’s name. However, if you use a name other than your legal name, you’ll have to file a Certificate of Assumed Name with the county clerk in the county or counties where your business will operate.

• Also known as a “fictitious business name,” “trade name,” or “DBA” (the acronym for “doing business as”), the Assumed Name Certificate informs the public of who is responsible for a business.

• Check with your local county clerk’s office for the forms and procedure for this step as they vary slightly by county. There will likely be a certificate that needs to be signed in front of a notary public, as well as a fee to be paid to the clerk’s office.

• Request a certified copy of the filed document as many banks require one to open a business bank account.

Step 3 Obtain any licenses or registrations required for your business.

• If your profession requires a license or has a licensing board, be sure to register your sole proprietorship. New York has a great licensing website to help you determine what licenses your sole proprietorship will need.

• Check with your city government for local requirements. Many cities require that every business get a basic business license, often called a tax registration certificate.

You shouldn’t focus on why you can’t do something, which is what most people do. You should focus on why perhaps you can, and be one of the exceptions. - Steve Case, co-founder of AOL

Step 4 If you plan to have employees, determine tax and other related obligations.

• Hiring an accountant is your best bet to ensure your sole proprietorship meets all tax responsibilities.

• If you have employees or plan to in the future, you’ll need an Employer Identification Number (EIN) from the IRS. This can be obtained easily via the IRS EIN website. An EIN can also be useful for sole proprietors without employees because it can function in place of a social security number.

• Determine your employment tax obligations, which may involve a withholding tax, unemployment insurance and wage reporting. Learn about and register for employment taxes at the New York State Department of Taxation and Finance's Business Taxpayer Home Page.

• Apply for worker’s compensation insurance, which is mandatory for all New York employers.

Step 5 Open a business bank account.

• Though not strictly necessary for a sole proprietorship, it’s a good idea to keep your business and personal finances separate. Bring your EIN, if you have it, and a copy of your Assumed Name Certificate to the bank. Bank protocol varies and you may not need any documentation if the name of your sole proprietorship includes your last name.

How to Start a Partnership in New York - in 6 Easy Steps

A partnership is created whenever two people agree to do business together for profit, no formal filings required. However, in forming a partnership, you do need to follow certain steps required of every business. Worth noting, a general partnership does not offer any liability protection so your personal assets may be accessible in a lawsuit or claim against your business.

Step 1 Choose a business name and check for availability.

• Your partnership’s name must be different from the names of other business entities already registered in New York. The Department of State offers a searchable online database of names already reserved.

• The database might not be complete so you should also check the availability of a proposed business name by writing to: Department of State, Division of Corporations, One Commerce Plaza, 99 Washington Avenue, Albany, NY 12231.

1. The written inquiry should state that you wish to determine the availability of a name and list the name or names to be searched. The request must be accompanied by a $5 fee for each name to be searched.

Step 2 File a fictitious business name, if necessary.

• If your partnership’s business name doesn’t include your last name and that of your partner, you’ll have to file a Certificate of Assumed Name with the county clerk in the county or counties where your business will operate. Also known as a “fictitious business name,” “trade name,” or “DBA” (the acronym for “doing business as”), the Assumed Name Certificate informs the public of who is responsible for a business.

• As they vary slightly by county, check with your local county clerk’s office for the forms and procedure for this step. There will likely be a certificate that needs to be signed in front of a notary public, as well as a fee to be paid to the clerk’s office.

• Request a certified copy of the filed Certificate as many banks require official documentation in order to open a business bank account.

When everything seems to be going against you, remember that the airplane takes off against the wind, not with it. - Henry Ford, founder of Ford Motor Company

Step 3 Draft and sign a partnership agreement

• While not mandatory, a general partnership agreement is highly advisable. Such an agreement clarifies the roles and responsibilities of each partner, and can help protect your interests in the event of a dispute.

• Many entrepreneurs aren’t aware that doing business with another person, even in the absence of a formal agreement, can create a de facto partnership and thus make both partners liable for the business’s obligations and debts.

Step 4 Obtain any licenses or registrations required for your business.

• If your profession requires a license or has a licensing board, be sure to register your partnership. New York has a great licensing website to help you determine what licenses your partnership will need.

• Check with your city government for local requirements. Many cities require that every business get a basic business license, often called a tax registration certificate.

Step 5 Determine tax and registration obligations.

• Hiring an accountant is your best bet to ensure your partnership meets all tax-related obligations.

• Your partnership will need an Employer Identification Number (EIN) from the IRS’s easy-to-use EIN website.

• If you plan to have employees, determine your employment tax obligations, which may involve a withholding tax, unemployment insurance and wage reporting. Learn about and register for employment taxes at the New York State Department of Taxation and Finance's Business Taxpayer Home Page.

• If you plan to have employees, you’ll also need to apply for worker’s compensation insurance, which is mandatory for all New York employers.

Step 6 Open a business bank account.

• A business bank account will help to keep your partnership’s business and personal finances separate. In order to open such an account, the bank may require your EIN, if you have it, and a copy of your partnership agreement or another filing (such as the Certificate of Assumed Name) with both partners’ names.

Legal Templates for Partnerships

• Partnership Agreement