Incorporating can be both a complicated and complex process, especially so in the state of New York, where local regulations can influence the procedure. From navigating the various business licenses and permits to laying out the formation documents, it is important to understand the process of incorporating a business in the Empire state. To help you get started, this article is a comprehensive guide on incorporating in New York, created with the help of UpCounsel’s experienced lawyers.

Incorporating a business entails the formation of a separate legal entity and can offer many advantages, such as limited liability protection. Similar to forming a partnership, UpCounsel’s network of experienced attorneys can help guide you through the incorporation process, including setting up the company’s structure, filing documents, and other legal matters specific to New York’s regulations.

Step 1: Choose the Structure of Your Business

Your chosen organizational structure should include who is in charge, how shares of the corporation are issued, and other operational procedures. The most common types of business structures are the limited liability company (LLC) and the corporation.

An LLC is a separate legal entity from the owners, and provides the same limited liability protection as a corporation, as well as asset protection. It is also more flexible in terms of ownership and operational procedures. Additionally, LLC’s are pass-through entities and are not subject to double taxation.

The corporation is the more formal structure and has more administrational and organizational requirements. A corporation is a separate legal entity, so it pays taxes and can engage in business transactions, enter into contracts, and borrow money, among other activities. Also, a corporation can create and sell stock to the public.

Regardless of the structure you choose, you must also comply with the local and state regulations.

Step 2: Name your Business

You must choose a unique name that abides by the New York State naming regulations. Some words are restricted and cannot be used without the approval of a state agency such as:

- Bank

- Coronavirus

- Attorney

- Insurance

Once you have chosen a name, you must conduct a search to make sure the name is not already in use. You can research the US Patent and Trademark Office as well as the New York Secretary of State office for this.

It is also important to take into consideration the branding and the future success of the business when choosing a name. Even after registering the legal name, you may still use a "doing business as" name or DBA. This name is used for bank accounts and will serve as the name customers will identify.

Step 3: File the Articles of Incorporation

The Articles of Incorporation are the legal documents filed with the state to create a business entity. They usually include information about the proposed company, such as:

- Corporate name

- Location of business

- Number of shares of stock

- Purpose of Business

- Names and addresses of the board of directors

The filing fee is typically between $40 and $200 and the articles must be approved by the Secretary of State. When filing the documents, you must keep in mind the local regulations. Furthermore, you must choose someone to serve as a registered agent in the state.

Step 4: Obtain Licenses and Permits

According to the New York Department of State, businesses operating in New York must obtain the appropriate licenses and permits for various regulatory agencies. Depending on the type of business, additional state permits or federal taxes may also be required. It is important to understand that the required paperwork is dependent on the type of industry, location, and size of the business.

Additionally, many New York counties and cities require a special local license to do business or study the local regulations. It is best to refer to the relevant municipality’s website to determine their requirements.

Step 5: Draft Documents for Business

When setting up and operating a business, various documents may be required in order to record deals or assets purchased and sold, sales contracts, employment agreements, shareholders’ agreements, and other important documents.

UpCounsel's experienced lawyers can help you with document drafting and review. This will help you to ensure that your legal documents are properly formatted, include required clauses and essential information, and are effective for your business.

Final thoughts

Incorporating in New York can be a complicated process, a challenge that is made easier with the help of UpCounsel’s network of experienced lawyers. From setting up the organization’s structure to drafting documents, they have you covered. Whether you need a one-time consult or an entire freelance legal department, UpCounsel’s attorneys are sure to help you start and successfully navigate the incorporation process.

Topics:

Incorporating in New York,

Forming a Business,

Business Lawyer