Start a Business in New York

Entrepreneur’s guide to form a business in New York

Whether you want to start a small business in NYC or a multinational corporation; the state has much to offer in terms of new business resources. It has the third-largest economy in the nation making its business climate vibrant and growth-oriented. The gross domestic product (GDP) of New York is $1.7 trillion with startups and small businesses making a high contribution overall to the GDP. An interesting aspect is that 67% of startups doing business in New York have expanded their operations by 2020 with food service establishments including restaurants accounting for 12 percent of such startups.

Why do companies prefer to incorporate and register in New York?

The 2021 small business profile by Small Business Administration (SBA) reveals that there are 2.3 million small businesses operating from the state. A lot can be attributed to the business opportunities and advantages the state offers. You can also start a small business in NYC to capitalize on the growth opportunities, business incentives, and several other benefits. Let us look at some of the advantages of doing business in New York.

• Tax Benefits – If you plan to start a business in New York then one of the top benefits is tax benefits and incentives that will help in easing the overall burden. There are several tax exemption programs for new businesses like the Accelerated Sales Tax Exemption Program (ASTEP), which aims to provide tax exemption to businesses in specific industries like manufacturing, industrial, food retail, and commercial. There are tax credit programs that you can take advantage of once you incorporate in New York like the New Markets Tax Credit Program.
• Professional Talent Pool – One of the most important requirements of any business is accessibility to local talent pools and this is one advantage you can leverage when you start a small business in NYC. It is home to some of the top universities in the nation including Columbia University, Cornell University, City University of New York (CUNY), and New York University (NYU) among others. One of the salient aspects is that New York also gets a rich talent pool from neighboring states or cities like Washington D.C., and Boston.
• Small Business Grants – If you are planning to start a business in New York then one of the key areas to focus on is the startup cost. The cost can be on the higher side depending on various supporting elements of your business like advertising, employee, rent or lease, utility, and New York business license. This is where small business grants can help bring down the initial cost or even the operational costs.

Steps to start a business in New York

Most startups and small businesses in the state of New York have been experiencing growth and are expanding at a faster rate than ever before. The state has achieved one of the lowest taxes in several decades, is home to an ever-growing talented workforce, and is attracting major investments and state-of-the-art innovations. These are key drivers of business climate and are considered essential building blocks for the progress of each business. You can start a business in New York in any industry but it is important to identify the key areas that will augment business operations in the future.

1. Prepare a New York Business Plan

If you are planning to start a business in New York then you need to identify the market, customers, risks, competition, and even the business formation and operational cost among other things. This can be made possible by formulating a business plan, which will also lead the way for an operational strategy. There are different types of business plans like a strategic business plan, start-up business plan, feasibility business plan, and operations plans among others. What you need is a start-up business plan as it will constitute various areas and elements of starting a business in NYC checklist. An ideal business plan will help you to minimize your overall risk and also pave the way for your strategic planning and prioritization. The various areas to focus on in order to create a strong business plan are:

• Executive Summary
• Synopsis of your business or startup
• Market overview
• Target Audience
• Products and Services
• Risk and Competition
• Revenue Model
• Operating Model
• Core Management Team
• Financial Plan

2. Attend Entrepreneurial Training or Development Programs in New York

You may have a brilliant idea but to actually implement it in the form of a startup or business can be quite demanding in terms of acquiring skills and knowledge pertaining to the very area of your business. If you have an idea and are planning to register a business in New York then it is important to understand how entrepreneurial training or development programs can further your cause. This type of program will help you to understand and identify the skills you possess and the skills and knowledge required towards making your business operational and successful. Hence, such programs should be an integral part of your starting a business in NYC checklist.

3. Choose a Business Structure for New York Business

One of the most important aspects, before you register a business in New York, is choosing the right business structure. In order to choose a business structure, you will need to identify your requirements and long-term objectives. For example: if you are looking for a structure that offers tax benefits then it is better to choose an LLC or an S Corporation. This is an important element of your starting a business in NYC checklist and you can choose unincorporated or incorporated business entities like:

• Limited Liability Company
• C Corporation
• S Corporation
• Sole Proprietorship
• General Partnership
• Limited Partnership
• Other business entities for Professionals

4. Naming Your New York Business

The identity of any new business is driven by its name as the name helps in creating brand value and increases brand recall. A good business name should take into account several factors. For example, it should be simple, short, and connected to the products or the services of the company. The uniqueness of a name is also a key factor as it will make your business stand apart. If you are planning to start a small business in NYC then there are certain legal naming requirements that you will be required to fulfill.

• The legal aspect of a business name will vary according to the type of business structure. For example, if you were to incorporate in New York then the corporate name will be governed by NY Bus-Corp L § 301 (2019). Similarly, if you were to register a business in New York as an LLC then the naming requirements would be governed by NY LLC L § 204 (2018).
• The New York business laws also govern the uniqueness of the business name. If you form a corporation then the name should contain words like the word “corporation” or “incorporated” and an abbreviation of any of these words like “Inc.” or “Corp.”. Similarly, if you were to form a limited liability company then the name should contain words like “Limited Liability Company” or abbreviations like “L.L.C.” or “LLC”.
• If you are planning on doing business in New York then the business name should be distinguishable from any other name existing in the database of the department of state, division of corporations.
• The laws for reservation or registration of a business name are different for different states. In most states, you are required to reserve a business name for a specific period including New York where you can reserve your business name for a period of 60 days by filing the “Application for Reservation of Name”.
• It is important to check business name availability prior to filing the name reservation application. Once you reserve the name, it will be easier to register a business in New York.

5. Choose a Location for your New York Business

A key element driving the success and growth of a business is the location of a business. New York is one of the best states for a startup but where in New York? New York, also known as New York City, has five boroughs, which are Manhattan (New York County), Queens (Queens County), Brooklyn (Kings County), Staten Island (Richmond County), and the Bronx (Bronx County). Each of these locations has its advantages and disadvantages but certain aspects are common for each of these counties. The aspects to consider before you start a small business in NYC are:

• Transportation – One of the foremost requirements for businesses especially in the manufacturing, retail, wholesale, and food industry is that of transportation infrastructure. New York has a complex but dense transport infrastructural system, which connects it to the other states as well as the rest of the world. The easy access to varied transport and transit systems will ensure you are able to start a business in New York and operate it without any hiccups.
• Accessibility – This aspect is important especially when it comes to employees and clients. The location of your office should be in a place that has parking space or accessibility to a mass transit system.
• Security – This aspect is an integral part of your starting a business in NYC checklist and you need to consider a location that is a low risk and low crime zone like the Bronx is a higher risk zone as compared to Manhattan South.
• Skilled Workers – There are certain areas in New York where finding skilled workers are more as compared to other locations. The requirement of skills varies according to the type of business for example Brooklyn has too many food establishments and hence it will be easier to find employees with certain skills like a Sous Chef or a Kitchen Manager.
• Demographics – Your target audience will drive your business. Hence, it is important to start a small business in NYC at a location that has a higher demographic or is accessible for your target audience.

6. Register Your Business with New York Department of State

New York with a $1.751 trillion economy and several rapidly growing industries like manufactured goods, commodities, and minerals, is considered as one of the favored destinations by entrepreneurs to start a small business in NYC. As an entrepreneur, you can choose from a wide variety of business structures available although some of the most popular forms of doing business in New York include a corporation, Limited Liability Company, and sole proprietorship.

We can help you to start a new business in New York

7. Get Your EIN

One of the important requirements for first-time entrepreneurs or new business owners planning to start a business in New York is the Employer Identification Number (EIN). It is important to understand that not all forms of businesses require an EIN but if your business has employees or if you are filing tax returns like employment or excise then you will be required to apply for this Federal Tax Identification Number (FEIN). The FEIN is issued by the Internal Revenue Service (IRS) and it is a unique identification number that will help in the filing of annual tax returns and offers several other benefits to small businesses.

8. Open a Business Bank Account for New York Business

When you start a business in New York, you will need to use a bank account for business-related expenses and the same account can also be used for receiving payment from customers, vendors, etc. If you are thinking whether to use the existing personal banking account then there are several disadvantages. One very salient fact is that mixing personal and business expenses can bring about complexities in the filing of tax returns. On the contrary, there are several benefits of having a business bank account. For example:

• It helps towards maintaining your business records in an organized manner
• It will help in building a business credit rating
• A business bank account will ensure easy filing of taxes
• Business bank accounts enable operations of point of sale systems for retailers

9. Obtain the Necessary New York Business License and Permit

Once you register a business in New York, there is one more important step that you need to take to make the business operational. You will have to apply for and obtain a business license. As a new business or a startup, you may require a single license or multiple licenses and permits depending on the type of business. Most licenses are issued at the state level but you may have to apply for and obtain local licenses depending on where your business is situated. Permit and licenses in New York can be categorized as under:

• Industry-based Licensing – There are specific industries that require businesses to obtain a license prior to starting operations. You can apply for a New York business license if your business is categorized under any of the following industries:
  • Agriculture
  • Transportation
  • Health
  • Recreation
  • Manufacturing
  • Construction
  • Specific Businesses like real estate broker
• Professional Licensing – If you are planning to start a small business in NYC where professional or occupational skills are required then you may need to obtain a professional license before applying for a business license. As an example, if you plan to open a business dealing with various aspects of Athletic training like management of athletic injuries, and conditioning, and reconditioning activities then you will have to apply for licensure by filing the required application along with a fee of $158. The fee for a New York business license for different professions will vary accordingly.
• Local Licensing – Once you register a business in New York, you need to check with the local authorities of the city or county your business is based in for licensing requirements if any. Each county or city has its own ordinances and licensing requirements and hence the licensing rules, ordinances, application, fees, and renewal in Suffolk County will be different from that of Richmond County. The local licenses and permits in addition to a state, industry, or New York business license.

10. Get Business Insurances

One of the important areas that most startups and new businesses need to focus on is business insurance. You may be asking yourself about the need for business insurance if you are planning to start a business in New York. The primary reason why insurance is recommended is that there is always a high probability and risk of business liability also known as a commercial liability. When a liability claim is made against your business then good business insurance will help in covering the cost of such claims. Some of the different types of insurance recommended if you plan on doing a business in New York are:

• Business liability insurance
• Business income insurance
• Workers’ compensation insurance
• Insurance specific to industries
• General liability insurance
• Product liability insurance
• Commercial property insurance
• Business owner’s policy for home-based businesses

11. Annual and Ongoing Requirements

Once you register a business in New York, in order to keep your business active; you will be required to ensure all annual and ongoing requirements are met. The annual requirements may vary according to the type of business structure although there are certain requirements that are common for all. Let’s look at the various annual requirements applicable if you incorporate them in New York.

• Annual Report – Most states in the USA require businesses to submit some form of report annually and they are known by many names like annual report, statement of information, etc. If you are doing business in New York as a corporation or an LLC then you will be required to submit a Biennial Statement once every two years with the New York Department of State – Division of Corporations. It has to be submitted by the end of the incorporation or registration anniversary month and IncParadise can help you in filing the New York Annual Report.
• Tax – One of the important annual filings is that of a tax return. The type of taxes you will be required to file will vary according to the business structure. The most common forms of taxes in New York are:
  • Business Corporation Tax
  • Sales and Use Tax
  • Withholding Tax
  • Pass-through entity tax (PTET)
  • Other taxes and reporting requirements
• Business License – You will be able to start a business in New York and make it operational only after you have obtained a business license. You may require a single or multiple licenses and permits depending on the industry and the county your company is based in. Once a New York business license is issued, it has to be renewed annually as non-renewal can lead to penalties and you may not be able to conduct business in the state.

Some Important Quick Resources for New York Business

Once you have a business plan in place, you can go ahead and begin the process to register a business in New York. You will need to conduct research pertaining to various aspects of doing business in New York right from identifying the right location to information on business laws and even entrepreneur training and business incentive programs. How do you find this type of information? There are several state-based resources available and we have compiled this list so that you can find the information you need.

New York State Department of State

The New York State Department of State (NYSDOS) consists of several divisions and provides information pertaining to how you can start a business in New York. The state department is a valuable resource for every entrepreneur or business owner as you can access information and also apply for several new business-related services including New York business license, renewal of license, business entity database, apostille, online filing of new business registration, local laws, and training information.

• Secretary of State
  One Commerce Plaza,
  99 Washington Ave
  Albany, NY 12231-0001
  Phone: (518) 473-2492, (518) 474-4429
  Fax: (518) 473-6648
  Website – https://www.dos.ny.gov/

New York Department of Taxation and Finance

The NYS Department of Taxation and Finance is one of the important departments of the state government and is primarily responsible for state taxation and revenue. Once you register a business in New York, you can search through a repository of information related to income taxes, business taxes, forms and instructions, tax bulletins and other publications, online services like Business tax account update (DTF-95), and Sales tax advance payment, and even options to register for sales tax when you incorporate in New York.

• New York Department of Taxation and Finance
  Harriman Campus Rd,
  Albany, NY 12226
  Phone: 518-485-6027
  Website – https://www.tax.ny.gov/

Division of Licensing Services

The Division of Licensing Services is a department within the Department of State and focuses on providing information to new and existing businesses on all aspects of licensing. Once you have filed registration documents to start a small business in NYC, you can check with the Division of Licensing Services for different state licensing applications and fees, New York business license regulations, licensing requirements, license renewal, and request license history or certification among others.

• Division of Licensing Services
  1 Commerce Plaza
  99 Washington Avenue, 6th Floor
  Albany, NY 12231
  Phone: 518-474-4429 or 711(TTY)
  Email: licensing@dos.ny.gov
  Website – https://dos.ny.gov/licensing-services

New York Division of Employment and Workforce Solutions

The New York Division of Employment and Workforce Solution is also known as the Department of Labor and is responsible for providing guidance and information on various aspects of labor and employment. If you are planning to start a business in New York with employees then this website can provide detailed information related to key areas like recruiting your workforce, how to trim labor costs through various workforce & economic development programs, HR and health & safety consultation services. You can also access information related to immigrant policy and affairs, wage and hour laws, and industry-specific labor laws.

• NYS Department of Labor
  Building 12
  W.A. Harriman Campus
  Albany, NY 12240
  Phone: (518) 457-9000 | (888) 4-NYSDOL (888-469-7365) | 711 TTY/TTD
  Website – https://dol.ny.gov/

NYC Small Business Resource Center

The NYC Small Business Resource Center provides valuable online resources in information format to entrepreneurs planning to start a small business in NYC. It constitutes a huge online library, where you can find information pertaining to business plans, business projects, and access to several programs like the customized training programs, and commercial lease assistance program. If you are planning to incorporate in New York then the incubators and workspaces network, Empire State Development’s small business hub, and the Gale virtual reference library database can be highly beneficial.

• NYC Small Business Resource Center
  18 West 53rd Street
  New York, NY 10019
  Phone: (212) 714-8400
  Website – https://www.nypl.org/help/services/smallbiz

New York Business State Incentives

The New York Business State Incentives is a division of the New York Business Express and its primary objective is to provide you with information on the various business incentives available in the state that you can benefit from. You can take advantage of these incentive programs after you register a business in New York. You will be required to create a business profile on the website to get a list of incentive programs customized for your company or industry. The website has more than 70 different business incentive programs on its database and can be quite helpful for doing business in New York.

• New York State Business Information Center
  Phone: (518)-485-5000
  Website – https://www.businessexpress.ny.gov/app/iw/startnewincentive

New York Department of Environmental Protection

The New York Chamber of Commerce was founded in 1768 and its mission is to help in improving the overall business climate as well as the quality of living in the state of New York. They provide guidance and information on various aspects of doing business in New York. For example, the promotion of a small business through the business listing, Trade Advocacy, Networking, and Educational Events, and much more.

• New York State Chambers of Commerce
  20 West 44th Street, 4th Floor
  New York City, NY 10036
  Phone: 212-CHAMBER (212-686-7220)
  Email: info@chamber.nyc
  Website – https://www.chamber.nyc/

Ready to start business in NYC?

New York is a state favored by entrepreneurs and first-time business owners for establishing their company or startups. If you want to register a business in New York and are wondering how to go about the process then IncParadise can provide customized and professional guidance and assistance. We are an expert registered agent and incorporation service provider in New York and have already helped thousands of businesses in New York in starting their LLC or corporation.