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Starting a Business in New YorkYou’re about to embark on a long and exciting journey, one full of hard work and rewards: starting a new business. With wide eyes and big dreams, you’re about to enter the world of business ownership.

But beyond the initial thrill of the startup decision, there’s a lot to consider. In fact, if you’ve never done it before, starting a business can seem like an intimidating mountain of work. Out of all your responsibilities and tasks, you might not even know where to start.

But have no fear. The good news is that once you have everything planned out and understand the process, the formation process is smooth sailing. And this is your go-to guide.

Everything you’ve been wondering about, everything you need to do, every question you have – it’s all right here. By the time you’re through these 17 steps, you’ll be a bonafide business owner who’s prepared for sustained success.

Time Saving Hack: When you form a business through online LLC services, they’ll register your business with the state and help you check off most of the startup-steps in this list. They assist you with everything from building a website to opening a business bank account and ensuring your new venture.

1) Write a Business Plan

Jumping into this endeavor without goals, directives, or a sense of direction can lead to a scattered, unproductive business.

A business plan lays the groundwork for your future success. It helps you analyze key elements of your business and forge pathways to achieve your goals. Here are a few things you should consider including in your business plan:

  • Executive Summary (a separate document that gives a complete overview of your business’ purpose, plans, goals, competition, opportunities, etc.)
  • Company description
  • Market Analysis (opportunities, competition, etc.)
  • Managerial or organizational structure
  • Products and/or services
  • Marketing strategies
  • Funding goals
  • Financial projections

Business plans aren’t just great for internal operations, but they give your business legitimacy in front of potential investors, customers, partners, and more. Need help? Check out this guide from the U.S. Small Business Administration.

2) Decide on a Business Name

You might’ve come up with the perfect name right away. If so, consider yourself lucky.

Sometimes, deciding on a business can be difficult, requiring brainstorming meetings and late-night rap sessions. That’s because your name is your business’ identity and reputation. It should be something that’s unique and memorable but also defines your business purpose.

Each business structure (see step 3) has its own unique naming restrictions. If you choose an LLC, you’ll need to include the words “limited liability company” or an abbreviation like “LLC.” Likewise, corporation names must include the terms “corporation,” “incorporated,” “company,” “limited,” or an abbreviation thereof. Plus, you’ll need to be careful with the state’s restricted and prohibited words.

Even if you comply with every other name requirement, your desired name will be invalid if it’s already taken. Perform a name search to see if it’s being used by another business. If so, you’ll need to come up with a new one. But if not, you’re free to reserve it or use it on your formation documents.

3) Decide on a Legal Structure

There are only a few types of business structures, but each one dictates some important parts of how your business will run.

The most popular types are the sole proprietorship, general partnership, limited liability company (LLC), S corporation, and C corporation. Most small businesses go with the LLC because of its unique blend of flexibility and personal asset protection.

However, you shouldn’t make this decision without reading up on all of your options. We’ve done plenty of research on each business type and developed side-by-side comparisons. Check out our LLC vs. Corporation and LLC vs. Sole Proprietorship comparison guides for a closer look.

4) Choose a Registered Agent

The Department of State needs a point of contact for your business, someone who will be available at your registered office address during typical business hours – 9am to 5pm.

This person is called a registered agent, and they serve as an intermediary with the state, receiving all of your company’s important legal communications and relaying them on to you. The New York registered agent ensures that no important state documents, deadlines, or payments fall through the cracks, so you’ll want to choose a person or company you trust.

You can choose either an individual or a business entity as your registered agent in New York, but they must:

  • Be an individual New York resident or a corporation authorized to do business in the state.
  • Have a physical address in New York.
  • Have a mailing address in New York (no P.O. boxes allowed).

Handling your business compliance requirements is an important responsibility, so if you’re choosing an individual as your agent, you might want someone who is familiar with business maintenance. However, there are a lot of viable New York registered agent candidates, so you can even appoint a friend or family member if you’d prefer.

Or, you can choose a registered agent service instead. These companies take care of all your registered agent responsibilities, and some will even handle your business formation and Biennial Statementing as well.

Important: You must continuously maintain a registered agent on file with the Department of State. If your agent resigns or you appoint a new one, you’ll need to notify them by filing the appropriate documents.

5) Register Your Business

This is the big one, the step that officially creates your business. No matter which business type you choose, you’ll need to register it with the Department of State.

LLCs: To publish an LLC’s information in the state’s records, you’ll need to file an Articles of Organization. Once approved, this document gives your LLC authority to do business in New York. This New York LLC filing costs $200, and you can submit it online or as a hard copy.

Corporations: The filing processes are similar for corporations, although instead of an Articles of Organization, you’ll need to file a Certificate of Incorporation. You can file online or using a paper form – both methods cost $125.

Sole Proprietorship/General Partnership: There are no official forms or fees to register as a sole proprietor or general partnership. Simply start doing business and that’s it! While this is obviously faster and easier, we recommend incorporating your business because of the personal asset protection LLCs and corporations provide.

Foreign Entities: What if you already formed your business outside of New York? In this case, you wouldn’t need to file an Articles of Organization or Certificate of Incorporation. Instead, you must foreign qualify your business by filing a hard copy Application for Authority for LLCs or corporations.

6) Publish your New Business

This step is unique to New York and requires that you publish notice of your LLC formation in two different local newspapers, a daily and a weekly or two dailies. These publications must print the notice once per week for six weeks, and you’ll receive a Certificate of Publication, which you must mail to:

New York Department of State, Division of Corporations

One Commerce Plaza, 99 Washington Avenue

Albany, NY 12231

Skip this step and the state can administratively dissolve your LLC, so even though it might seem difficult, don’t forget it!

7) Get an EIN

The Employer Identification Number (EIN) is your ticket to doing state and federal taxes. It’s a nine-digit number, much like a Social Security Number, that identifies your business on tax documents.

If you’re forming an LLC, it will be considered a “pass-through” entity, so the business itself won’t pay federal income taxes. Instead, you and the other members will report income and losses on your personal tax returns.

But this doesn’t mean you can go without an EIN. If your LLC pays any type of business taxes – like Sales, Use, or Unemployment Taxes – or hires employees, you’ll need to get one.

Unsure if you need one? The IRS provides a useful “Do I need an EIN?” link on this page, where you can also apply for an EIN. If you go through the online application process, you’ll receive your number immediately.

Otherwise, you can submit a Form SS-4 by fax to (855) 641-6935 or by mail to :

Internal Revenue Service Operation

Attn: EIN Operation

Cincinnati, OH 45999

8) Open a Business Bank Account

LLC and corporation owners are required to keep their personal and business finances completely separate, or they risk losing their personal asset protection. To do so, you’ll need a business bank account.

The good news is that opening a business bank account is pretty simple. Just pay a visit to your bank’s local branch and sit down with one of the bankers there. You will need to present your formation documents, an EIN number, and some personal information. Then, you can direct all of your business income and expenses to that account instead of a personal one.

It doesn’t really matter which bank you choose, whether it’s a national giant like Chase or Bank of America or a small, local bank. However, it’s usually easiest to go with the one where you have existing accounts.

Quick Tip: If you’re considering to use an LLC formation or incorporation service, IncFile is the best when talking about business banking offers. They have a special partnership with Bank of America that gives you a $450 sign-up bonus if you bank with them.

9) Handle Any Tax Obligations

Ah, taxes. They’re always part of the picture, especially when you run a business.

Familiarizing yourself with your business’ tax requirements will help you establish a solid financial plan going forward. LLCs don’t need to file a corporate tax return and pay federal income taxes, so you’ll handle these taxes as part of your personal return.

Corporations, on the other hand, will need to file a Franchise Tax, which is based on the highest amount out of your business income, business capital, or a fixed dollar minimum. Additionally, New York City has its own separate Business Corporation Tax.

Sole proprietorships/general partnerships, on the other hand, will need to pay self-employment taxes.

There are a few other taxes your business may owe in New York, depending on your circumstances:

Annual Filing Fee: LLCs and LLPs in New York must pay a filing fee which can cost $25 – $4,500, depending on their gross in-state income for the year. You can find instructions and a full fee table here.

Sales and Use Taxes: Every business that sells goods in New York must also pay Sales and Use Taxes at a statewide rate of 4%. Your local jurisdiction may have an additional Sales Tax, which you can find here.

Withholding and Unemployment Insurance Taxes: Businesses that hire employees must withhold income taxes on wages and contribute to the state’s Unemployment Insurance.

Local Taxes: Your local jurisdiction may have its own business taxes. New York City, for example, has a number of unique business taxes. Check your city or county’s website to find out which additional taxes your business might need to pay.

10) Find an Accountant

Sometimes it’s easier to hand off your financial responsibilities to a professional. Not only will an accountant ensures that your taxes are filed and paid correctly, but they might also find a few ways to save your business money.

Bookkeeping and tax procedures are time-consuming and require some specialized knowledge. Balance sheets, financial reports, cash flow, audits, and much more – an accountant can ensure that your company operates smoothly and streamlines its expenses.

This can be expensive depending on the complexity of your finances, but the benefits an accountant offers can be well worth it.

11) Create an Operating Agreement

An operating agreement constructs a framework of procedures and standards for your business. This is where you can lay out processes for member conduct, asset allocation, compensation policies, voting procedures, dissolution, and much more.

New York is one of the few states that requires its LLCs to create an operating agreement. All of the business’ members or officers must enter into this agreement “before, at the time of, or within 90 days after the filing of the Articles of Organization” according to the Department of State website. This set of procedures gives your business legitimacy in front of courts, banks, government agencies, and more. Plus, it can be useful in protecting your LLC during legal disputes.

You can either draft one yourself using an online template, or you can hire an attorney or an incorporation service to take care of it for you.

Once you’ve drafted your agreement, it must be approved by each of your LLC’s members, then filed with the rest of your business documents. You do not need to submit it to the Department of State.

Quick Note: ZenBusiness is the only business formation that includes an operating agreement or corporate bylaws in every package. All other services will charge you extra or push you to buy a more expensive package.

12) Acquire the Necessary Licenses

After filing your formation documents, your business is legitimate, but it might still need specific licenses before opening its doors in New York. Your business might need zero licenses, or it might require multiple. There are a few different categories that these licenses can commonly fall under:

Professional Licenses: Certain occupations must obtain licensure from state boards before commencing business in the state. You can find a list of licensed professions on the Division of Licensing Services website.

Environmental Licenses: If your business affects the land, air, or water in New York, it may require certain environmental or agricultural permits. Check out the Department of Environmental Conservation website for more information.

Health Licenses: Businesses in foodservice, healthcare, childcare, and other human services usually require licenses or permits from the Department of Health.

Local Licenses: Your specific city, county, or municipality might have its own licensure requirements. Take a look at your local government’s website to find out.

The state makes it easy to find all of your necessary licenses in one place. On the New York Business Express page, you can search for your business type or profession and it will present you with a list of potential licenses and permits.

13) Consider Business Insurance

Even though it’s not pleasant to consider, there’s always a chance that unforeseen events might take a toll on your assets.

While forming an LLC or corporation offers some personal asset protection, additional business insurance can also protect your business assets in cases of lawsuits, damages, etc. You can acquire insurance for your business products, vehicles, specific occupations and much more.

If you hire employees, you’ll also need to get workers’ compensation insurance. SBA.gov has a useful guide for determining which forms of insurance your new business might need.

14) Build a Website

Your company’s digital presence is just as important as its physical one. Like it or not, most potential customers will find your business online, and if you don’t exist online, you’re missing out.

But don’t worry, you don’t need to be an HTML or web design expert to build a website. Sites like WordPress and Squarespace make it easy to construct an elegant and responsive website, no coding necessary. But if you’re not comfortable or confident doing it on your own, you can always hire a professional web designer to take care of it for you.

Quick Note: As we mentioned earlier, if you’re looking to build a business website, there are a handful of good business incorporation services that will help you get started. ZenBusiness or IncFile, in our opinion, have the best business website offers.

15) Launch Social Media Accounts

Making your mark on the digital landscape doesn’t start and end with your website. Most successful businesses also have a robust social media presence on multiple platforms. Facebook, Twitter, and Instagram are all great ways to connect organically with potential customers and develop your brand voice.

Just don’t forget to publish consistent social media content, or you’ll have trouble building a base of followers.

16) Understand Ongoing New York Requirements

After you’ve launched your business, things will likely be moving at 100 miles per hour as you evolve and grow. But in all of the excitement, you can’t forget your state’s ongoing compliance requirements. Every state has its own annual or biennial business requirements.

Your New York business will need to file a Biennial Statement every two years by the end of its anniversary month (the month you originally formed it). This filing isn’t pricey, just $9, and you can complete the entire process online. Miss your Biennial State due date, however, and your business will lose its good standing with the state.

17) Check Out New York Small Business Resources

You’re not on this journey alone. There are plenty of free resources available to make starting and growing your business a smoother, easier process.

Seeking out business resources might seem intimidating, but they’re more accessible than you might initially think. Start out at SBA.gov, which contains a wealth of valuable information, support, and resources, even state-specific ones on New York’s district office page. You might find this resource publication especially helpful. It provides info on local business development centers, loan opportunities, networking events, consulting, and more.