How to Start a Business in New York

Introduction

If you’re thinking of starting a business in New York City, it’s important to understand the requirements. While there are some basic steps every business needs to take, such as choosing a legal structure and getting a federal tax identification number, there are also many optional steps that can help make your life easier as an entrepreneur. Here’s everything you need to know about how to start a business in New York City:

Choose the Right Legal Structure

There are several forms of business structure, each with its own advantages and disadvantages. You should carefully consider the following forms before deciding which is right for you:

• Corporation – A corporation is owned by shareholders who can invest in the company and receive dividends from profits. Corporations also have limited liability protection, meaning that if the business goes bankrupt or someone sues it, creditors cannot come after shareholders’ personal assets (like their homes). However, forming a corporation requires filing articles of incorporation with your state government and paying annual corporate fees.
• Limited Liability Company (LLC) – An LLC combines features of partnerships and corporations. Like a partnership, members report profits on their individual tax returns; like a corporation, members are not personally liable for debts incurred by the company. The IRS does not recognize S-corporations as separate entities.

Get a Federal and State Tax Identification Number

Before you can apply for a business license, you’ll need to get a federal tax identification number (EIN) and state tax identification number. Your business’s federal EIN is called an Employer Identification Number (EIN), which is essentially the same thing as a Social Security Number for your business. The state’s version of this is called a New York State Taxpayer ID (NYSTID), which allows you to file taxes in New York State. Both are free to obtain from the IRS or NYS Department of Taxation and Finance, either online or by mail.

Get a New York Seller’s Permit

A New York seller’s permit is a requirement for any business that sells goods or services in New York. You’ll need to fill out an application, pay a fee and get your picture taken to obtain one. The State Department of Taxation and Finance provides sellers’ permits online as well as through their offices located throughout the state.

File a doing business as (DBA) name application.

A DBA is a formal name for your business. It’s required by law, and it requires you to file a form with the county clerk.

A DBA filing is a public record, so anyone can see who owns what company in New York.

Register your Business

Registering your business with the NYS Department of Labor is a simple process that can be done online. You’ll need to provide:

• Your business name and address
• The names and addresses of owners, officers, directors, partners, or other responsible parties
• The type(s) of business entity you will be operating (corporation/partnership/limited liability company)

You will also have to designate whether or not you intend to hire employees in the near future. If so, enter their names and addresses as well as their titles and brief descriptions of their duties. You must also provide contact information for your accountant or attorney who helped establish your business if either one is required by law (this varies depending on what type of entity you’re operating).

Register with the NYS Tax Department.

Registering with the NYS Tax Department is a straightforward process. You can do so either online or by mail.

How much does it cost?

The fee to register will vary depending on your business structure. If you plan to incorporate, the cost is between $40 and $300 depending on your entity type and the number of shareholders/members. If you are not incorporating, there are no additional filing fees associated with registering as an LLC or sole proprietorship (both have a minimum filing fee of $20).

Apply for Unemployment Insurance

The New York State Department of Labor helps workers who have lost their jobs due to a layoff or other unforeseen circumstances. If you are eligible for unemployment insurance, the department will send you an application to complete and return. You can also call 1-800-LAW-NYSD (1-800-529-6937) or visit the website at www.labor.ny.gov/unemployment_insurance/.

If you have been hospitalized overnight as a result of an accident related to your job, injured while commuting back and forth from work or injured by another employee at work, then your employer must pay disability insurance benefits while you are unable to work because of the injury. To receive these benefits:

• Complete Form L60AD (Application for Disability Benefits).
• Get two doctors’ certificates stating that your injuries prevent you from working full-time for at least 20 weeks during any period of 26 weeks. These certificates must be given within 26 weeks after the date on which they are dated; otherwise, they will not be accepted by NYSDOLESP&A Branch Offices

Takeaway

As you can see, there are a lot of steps involved in getting your business started. Luckily, many of these processes are simple enough that you can get them done on your own. In fact, once the paperwork is complete and everything is filed with the state and city, you can open your doors for business!

Conclusion

Starting a business can be a daunting prospect, but the city of New York wants to make it as easy as possible. If you’re looking for ideas on what kind of business to start or how to get started, we’ve got some tips for that too!