New York Business Registration: Everything You Need to Know
New York business registration involves selecting your company name and registering it with the New York Secretary of State. The state can be very strict when it comes to accepting your company's name and might reject new filings for reasons that seem trivial to the filer.3 min read
2. Sole Proprietorship
3. Limited Liability Company
New York business registration involves selecting your company name and registering it with the New York Secretary of State. The state can be very strict when it comes to accepting your company's name and might reject new filings for reasons that seem trivial to the filer. Some of the reasons the state might reject your name include:
- Not getting consent to use certain common words in your company's name.
- Using an inconsistent spelling of the name when filing your documents.
- Using a foreign word without including the translation.
You can form several types of corporate entities in New York, including:
- Business corporation
- Limited liability company
- Professional corporation
- Professional limited liability company
- Not for profit corporation
- Religious corporation
- Cooperative corporation
- Limited partnership
- Design professional corporation
- Registered limited liability partnership
Types of Business Entities in New York
Many people dream of starting a business in New York City. The city is known for its strong business atmosphere as well as its popular startup scene. Newer companies, especially in the media and technology areas, find that New York City is one of the most inviting places to open a business.
One of the most important business decisions you will face when creating your business is deciding which type of business entity you will form. When making this decision, you will need to consider such things as:
- Annual filings
The corporate entity structures you can choose from in New York include a sole proprietorship, limited liability company, and corporation.
A sole proprietorship is the easiest type of business to own and operate. Under a sole proprietorship, you will operate your business under your own support. Your company will not be distinguishable from you legally. You can choose a name for your business, but the company will be listed under your name legally.
In a sole proprietorship, you can mix personal and business funds, but you are also personally responsible for all business costs. Having your business be an extension of yourself can put your personal assets at risk in the event of a lawsuit. While you might experience liability in a sole proprietorship, there are also many benefits to creating your company this way. You will be able to:
- Forgo the formalities of a corporation, such as meetings and voting requirements.
- More easily track and file your taxes through your personal tax return.
- Offset some of your income with business losses or expenses.
There are also some drawbacks to operating your business as a sole proprietorship, such as:
- You cannot raise money by selling interest in your business.
- Your business would have little value if you were to pass away or otherwise become incapacitated and unable to work.
- Some official contracts cannot be awarded to a business that operates as a sole proprietorship.
Limited Liability Company
Choosing to form your business as a limited liability company (LLC) can provide a business owner with benefits such as:
- Legal protection of the owner's personal assets.
- Similar benefits to a corporation without the amount of paperwork and formalities.
- The benefits of pass-through taxation, which often leads to lower taxes and helps you to avoid the double taxation corporations experience.
- The ability to have more than one owner.
- The ability to have as many shareholders as you want, which allows you to raise capital.
To form your LLC in New York, you will need to:
- File your articles of organization with the Secretary of State.
- Send in the $200 filing fee.
There are also drawbacks to forming an LLC, including:
- As an LLC owner, you cannot pay yourself a wage.
- You must pay self-employment taxes on your share of the profits.
- You must pay taxes on your portion even if you did not take a distribution.
- LLCs are not perpetual and are expected to last 30 to 40 years.
When you form your company as a corporation, it will act as a legally formed body that can:
- Be sued.
- Be taxed.
- Commit crimes.
- Buy and sell property.
Benefits of choosing a corporate structure include:
- More freedom to act.
- Protection to shareholders from legal action.
- An unlimited existence.
If you need help with your New York business registration, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.