Starting a business can be as exciting as it is nerve-racking. Lately, I’ve been getting a lot of questions about how to register a business, specifically a company in New York. As someone who has probably registered more companies than he can count, I figure I should give you guys some answers.
It would be too much for me to explain how it works in every state, but New York is the best example to pick…
If you live in New York and want to start a business, here is the checklist:
- Choose a Unique Name
- Decide on a business structure: Nonprofit, Limited Liability Company (LLC), S Corporation, C Corporation, or Sole Proprietorship.
- Prepare and Sign Articles of Organization and an Operating Agreement
- Register with the New York Department of State.
- Fulfill the Publication Requirements
- Obtain an Employer Identification Number (EIN)
You can legally run your business once you’ve filed and obtained all of the necessary licenses and permits. Don’t forget to keep your records by state regulation guidelines to avoid any legal issues with your company.
The first step is to decide your business identity.
You’ll need a name for your business that isn’t already used by another company in New York. Choose a catchy name that reflects the products or services that your business will provide the community. In New York, you can form a sole proprietorship, partnership, limited liability company, or corporation. Each of these legal structures has different tax implications and you may need to speak to an accountant to get some clarity on what is best for you and your new business.
When you’re ready you have to fill out all of the necessary forms to organize your business, but if you don’t want to create your organizational documents from scratch, New York has templated blank forms you can use as a starting point.
Fill out and submit your formation documents to the New York Department of State. If you’re forming a limited liability company or a corporation, file your formation documents and pay the required fees to establish your business legally.
Even if you don’t intend to hire any employees, you will require an EIN to distinguish your business from yourself. So make sure you obtain an employer identification number from the Internal Revenue Service.
The next step is to register for taxes.
For your business, you’ll need your own NY.govv account. Sign up with the New York Business Express. You can use the new york business express to register your business for taxes and apply for any permits or licenses you may require once you have a ny.gov business account.
Then you need to get a certificate of authority to collect sales taxes. If your company sells taxable goods or services, you’ll have to collect and remit your customers’ state and local sales taxes. Also, you must register for city taxes if the company is in New York City.
Once you have all of your state permits and licenses in order, find out whether you require any additional business licenses or other permits to conduct business in your specific location.
Don’t forget about the publication requirements.
Many states have unique requirements after the state accepts the LLC filing. New York requires that a notice related to the formation of the actual Articles of Organization get published in two different newspapers in the county of the registered office of the LLC for six consecutive weeks.
Make sure you ask for an affidavit of publication from the publisher because you’ll need that to file a Certificate of Publication with the Division of Corporations for New York.
Another essential step is to keep your licenses and registrations up to date.
Maintain financial records and supporting documentation for your business. In case of an audit, keep digital and financial records that support the information you provided on your state tax returns for at least three years. Quarterly sales tax returns must be filed. Set up a separate bank account to hold the sales tax you collect from your customers and pay it to the state directly from that account each quarter. Report new hires within 20 days of their start date. Your employees’ higher date is the first day they began working for you in a paid capacity. Withhold state income taxes from their pay. The tax department will inform you of the state income tax rates and how much will be withheld from your employees’ pay. Contribute to your state’s unemployment insurance. Generally, if you pay more than $300 in wages in a calendar quarter, you must pay state unemployment insurance contributions.
You can register and pay for your contributions on the New York Business Exchange website. File income tax returns at least once a year, regardless of how your business is structured. You are responsible for reporting and paying taxes on the income earned by your business throughout the year. If your company is a corporation, you must file a separate corporate return; otherwise, you must report the income and expenses of your company on your tax return.
IN CONCLUSION, FOR NY STARTUPS
Over 98% of businesses in NY have fewer than 100 employees. However, these small businesses employ more than half of the state’s private-sector workforce. The state’s Small Business Division oversees many programs and initiatives that support entrepreneurs and encourage small business growth. You also have access to organizations like the New York Small Business Development Center that provide guidance, training, and resources to new and existing small businesses.
Good luck with your business, and I can’t wait to hear the updates on how your first year went!