If you plan to start a business in New York State, there are a number of steps you need to follow. In this guide, we'll tell you how to start a business in New York and give you the tips that you need to succeed.
Small businesses make up 99.8% of businesses in New York. These 2.1 million small businesses employ 4 million people, 50.2% of the state's employed population. Small businesses exported 57.0% of the state's total exports, which amounted to $68.7 billion.
There is support for new small businesses and entrepreneurship in New York. In 2016, New York lending institutions issued 417,765 loans under $100,000. The state offers many business development programs like START-UP NY, a program that offers eligible businesses the opportunity to operate tax-free for ten years when partnered with academic institutions, and the Empire State Development’s Small Business Division, which offers guidance to businesses with fewer than 100 employees through a range of programs and initiatives.
How to Start a Business in New York Checklist – Free Download
Our How to Start a Business in New York checklist is a comprehensive, step-by-step guide through the entire process of starting your business.
How to Start a Business in New York:
1. Form a business entity.
You need to determine the legal structure of your business, whether you want it to be a sole proprietorship, partnership, LLC, or corporation. For most small businesses, an LLC (Limited Liability Company) is a great option. They are easy to set up and manage and they have tax benefits. The entire process to set up an LLC in New York can cost between $250 and $2,000.
2. Register with the Secretary of State, Division of Corporations.
Businesses in New York must register with the Secretary of State, Division of Corporations. Once you have your name and have a registered agent, the Secretary of State will send the registered agent formation documents, process information, and documents about reporting and taxation.
File Articles of Organization with the Secretary of State. Fill in the forms and then file them with the New York Division of Corporations, either online or through the mail. There is a filing fee of $200.00.
Publish these Articles of Organization. The state of New York requires that you publish your Articles of Organization in two newspapers, one daily newspaper and one weekly newspaper, within 20 days of formation. This can cost between $1,500.00 and $2,000.00. Using a registered agent service will bring the cost of publication down to between $80.00 and $100.00.
File Certificate of Publication. File your proof of publication with the state for a fee of $50.00.
Adopt an operating agreement. New York State requires that an organizational meeting be held to issue member certificates and take member contributions.
3. Get an Employer Identification Number (EIN).
Every business needs to have an Employer Identification Number (EIN). An EIN is a number that the IRS uses to identify your business when it comes to the taxes that you deduct from your employee's wages.
The IRS issues EINs. Visit the IRS's website to complete an application online, and save your EIN confirmation notice once you receive it.
4. Open a bank account.
To maintain accurate records and protect yourself, you must open a small business bank account. Keep your business finances separate from your personal ones. With a business bank account, you can obtain statements and access products that would not be available to you as an individual.
Seek the advice of a business representative at your local bank. They can take you through the process and help you set up an account in the name of your business. You can also authorize other employees or company representatives to have access to the account.
5. Register with the New York State Department of Taxation and Finance.
For a Sales Tax Certificate of Authority, and to stay generally tax compliant, you must register your company with the New York State Department of Taxation and Finance through the New York Business Express portal. This will allow you to conduct tax-related transactions online.
Businesses in New York pay franchise tax. Read our article on franchise tax for more information.
6. Hire employees and report them to the state.
Upon hiring a new employee or re-employing an old one, you as an employer have only 20 days to report them to the New York Tax Department. You can report them online by going to the Department of Taxation and Finance New Hire Online Reporting Center website, or through the mail. You will need to submit a copy of the employee's Form IT-2104, Employee's Withholding Allowance Certificate.
Failure to report correctly and on time is penalized. The fine for reporting too late is $20.00 per employee, and the fine for incomplete or false reports and information is $20.00 per report.
For help with paying your employees on-time consider using a payroll company. There are many New York payroll companies you can call on.
7. Obtain applicable New York state licenses and permits.
Depending on the type of business you plan on starting you will need a set of licenses and permits. There are federal, state, and local licenses and permits. Visit businessexpress.ny.gov to find out which licenses and permits you require.
You might need a Professional License. New York Department of State issues licenses for over 32 professional occupations. To be eligible for a professional license you must have completed an approved course of study, and passed a written and practical exam.
8. Purchase insurance.
To protect yourself, your employees and your business assets, get insurance. The most common types of business insurance you should consider are:
- General liability insurance.
- Cyber insurance.
- Commercial property insurance.
- Health insurance.
- Commercial automobile insurance.
In New York, businesses are required by law to carry Workers' Compensation Insurance.
How do I start a small business in NY?
How do I get a business license in New York State?
Once you've formed a legal entity and registered with the Secretary of State, Division of Corporations, visit the New York State License Center online to find out what state, local, and professional licenses you need. You can apply for the licenses online.
How much does it cost to start a business in New York?
It costs $250.00 to get an LLC in the state of New York, but that isn't counting the costs of publishing Articles of Organization in two newspapers.
Do I need to register my business in New York?
Yes, depending on the type of business you plan on starting you will need a set of licenses and permits. There are federal, state, and local licenses and permits.
How do I start my own home business in NY?
How do I start a cleaning business in NYC?
- Create a budget.
- Select a business structure.
- Obtain licenses and business insurance.
- Purchase cleaning equipment.
- Determine your rates and your business model.
- Market your cleaning business.
How much is a vendor's license in NY?
A New York City general street vendors' license costs $100.
Where do I go to get a vendor's license?
You will first need to obtain four permits:
- Sales tax permit from the state government's revenue agency.
- Tax ID number from the local government's revenue agency.
- General business license from the city or county clerk's office.
- Additional vendor license from the city or county government.
How long does it take to incorporate in NY?
Processing your New York Articles of Incorporation will take between 2 and 4 weeks if you file by mail. You do have the option of requesting a shorter processing time by paying a $75.00 fee.
What do I need if I want to form an LLC in New York?
How do I start an S Corp in New York?
- Choose a name.
- File Certificate of Incorporation.
- Appoint a registered agent.
- Set up a corporate records book.
- Set up your corporate bylaws.
- Appoint initial corporate directors.
- Hold the first Board of Directors meeting.
- Issue stock to shareholders.
- File biennial report.
- Comply with all tax and regulatory requirements.
What are the best banks for small businesses in New York?
What information do I need to apply for a Sales Tax Certificate of Authority?
- Reason for applying.
- Contact information for the business.
- Entity type.
- Date business begins.
- Bank account information.
- License numbers.
- Business contacts and responsible persons' information.
What new hire information is needed to be reported in New York state?
- Employee's name (first, middle initial, and last).
- Employee's address (street, city, state, and ZIP code).
- Employee's Social Security number.
- Employee's hire date.
- Employer's name.
- Employer's address (street, city, state, and ZIP code).
- Employer's identification number.
- Employee's health insurance benefits (if applicable).
What common business licenses and permits are there?
- Business License and/or Tax Permit.
- Building Permit.
- Health Permit.
- Occupational Permit.
- Signage Permit.
- Zoning Permit.
Do I need to publish my LLC?
Yes, the State of New York requires all businesses to publish Articles of Organization in two newspapers. Proof of publication is needed for finalizing registration.
How long does it take to get an LLC in New York?
It can take up to 4 weeks for an LLC to be processed. Some registered agent services can expedite the process.
What taxes does a New York State LLC pay?
Most LLCs are pass-through tax entities, so they do not pay income taxes themselves. Instead, tax responsibilities fall on the individual LLC owners and members. New York does require an annual filing fee from LLCs, which can range from $25.00 to $4,500.00, depending on gross income.
How can I start a food business in New York?
- Decide on what type of food business it is you want to start.
- Form a business entity.
- Apply for an EIN.
- Secure funding.
- Open a business bank account.
- Register for tax.
- Find a location.
- Get licenses from the Division of Food Safety and Inspection.
- Hire employees.
- Source ingredients.
- Buy equipment.
- Get insurance.
- Market your business.