New York Foreign Qualification

The state of New York is home to approximately 2.3 million small businesses including domestic and foreign entities. These businesses in a variety of industries are integral to the economic growth of the state. One of the reasons for New York LLC foreign registration is that the state offers a good startup environment driven by funding opportunities including VCs, grants, business incentives, training programs for entrepreneurs and skill development, and Foreign Trade Zones (FTZ) among others. A New York foreign business registration will help you to qualify for different types of state and federal incentive programs as well as small business assistance programs.

What is New York’s foreign qualification?

Foreign qualification in New York is a process by which you will be able to register your business in any state aside from your home state. The process allows you to legally pursue business opportunities or expansion across state borders without the need to undergo the incorporation of a new business.

Example: If you have formed a domestic LLC in Florida then this will be the home state for your business. Now, if you plan to expand your operations to New York then you will be required to undergo New York LLC foreign registration. This doesn’t mean that you have to register your business again but simply apply for a certificate that authorizes you to conduct business in the state.

Doing business in New York

If you are thinking of doing business in New York and have already formed a company in another state then, your business will be considered as a foreign entity in NY. The operation of such a company will be governed by the New York Laws for foreign corporations or LLC. The term “doing business in New York” refers to the practice of conducting different business activities in any state other than your home state or the state of initial business formation. In such a scenario, the said business will be required to apply for a New York LLC foreign registration or foreign incorporation.

• If your company owns a store in New York
• If your business owns or is planning to own a warehouse in New York
• If you are maintaining offices or agencies for carrying out business activities like selling a product or services
• If your company has employed officers, employees, and agents in the state

New York Foreign Qualification Process

If you have already formed a business in any state other than New York then in order to transact in the state, you will be required to apply for New York foreign corporation registration or LLC registration depending on the legal structure of the business. The process for New York foreign business registration varies from one state to another and may also be different for different forms of business. It is important to note that failure to register with the state as a foreign entity will result in your company being unable to bring a lawsuit in any New York court.

New York foreign Corporation registration

If you already own a corporation in another state and want to incorporate in New York then you will need to apply for a foreign qualification in New York. The foreign corporation registrations are governed by 2020 New York Laws, BSC – Business Corporation, Article 13 – Foreign Corporations. You have to obtain the right authorization to conduct business in the state as a foreign corporation and there is a process for the same.

What is a New York foreign Corporation?

A New York foreign corporation is an out-of-state business that has been authorized to conduct business just like a domestic corporation can conduct legally. In order to transact in the state, you will be required to apply for New York foreign corporation registration while being compliant with the state laws. One of the most important aspects of foreign qualification in New York is the business name. As a foreign entity, you will be able to transact or conduct business in the state under an assumed name also known as a fictitious name or DBA (Doing Business As). Once you have identified such a name, you will need to conduct a New York foreign entity search on the business entity database of the Department of State in the Division of Corporations.

How to register a foreign corporation in New York?

Once you have identified a name and filed the Certificate of Assumed Name, the next step is New York foreign corporation registration. The following steps will help you identify the requirements for New York foreign corporation registration.

• Foreign Corporation Qualification – According to 2020 New York Laws, BSC – Business Corporation, Article 13 – Foreign Corporations, 1301: Authorization of Foreign Corporations, a foreign entity will not be allowed to conduct business in this state until they have been authorized or until they undergo foreign qualification. In order to get the authorization, you will need to complete and file the Application for Authority to transact business in the state pursuant to NY Bus Corp L § 1304 (2020). The statutory filing fee for New York foreign business registration is $225. The Application for Authority along with a Certificate of Existence has to be filed with the New York Department of State, Division of Corporations.
• Certificate of Existence – A certificate of existence is an important step in New York foreign corporation registration. It is also known as a certificate of good standing and is normally issued by the home state of the foreign entity. The home state is the jurisdiction where the foreign entity was initially incorporated. The certificate is generally issued by the office of the Secretary of State or even the Tax Department in the home state.

New York foreign LLC registration

If you already have a Limited Liability Company conducting business in another state and want to expand its operations in New York then you will need to apply for a foreign qualification in New York. The New York foreign business registration for LLC is governed by 2020 New York Laws, LLC – Limited Liability Company Law, Article 8 – Foreign Limited Liability Companies. You will be required to obtain the right authorization to transact business in this state as a foreign LLC and there is a process for the same.

What is New York foreign LLC?

A foreign LLC in New York is a business entity that is operating in any other state except New York. It is an out-of-state business and hence requires proper authorization to transact business in this state. Once New York LLC foreign registration is done, such a business entity will be able to conduct business legally just like a domestic LLC. New York foreign business registration is possible only if you are compliant with all foreign business laws of the state.

How to register a foreign LLC in New York?

Once you have filed the Certificate of Assumed Name, the next step is New York LLC foreign registration. The following steps will help you identify the New York state requirements for foreign business registration.

• Foreign Qualification for LLC – 2020 New York Laws, LLC – Limited Liability Company Law, Article 8 – Foreign Limited Liability Companies. A foreign LLC will not be allowed to conduct their business in NY until they undergo foreign qualification in New York. In order to get such authorization to conduct business in the state, you will be required to file the Application for Authority in the state pursuant to NY LLC L § 802 (2020). The statutory filing fee for a New York foreign business registration is $250. The Application for Authority along with a Certificate of Existence has to be filed with the New York Department of State, Division of Corporations.
• Certificate of Existence or Good Standing – A certificate of existence is also known as a certificate of good standing and is mandatory for New York LLC foreign registration. It will be issued by the home state or the state where the foreign LLC was initially formed. Normally, the certificate is issued by the office of the Secretary of State or the Tax Department of the home state.

  For example: If your LLC was initially formed in the state of Texas then you will need to apply for the certificate of existence from Texas. It is known as the certificate of account status and is issued by the Texas Comptroller of Public Accounts. You will be required to submit the certificate of account status along with the New York LLC foreign registration application to form a business in the state.

• Publication – The last step towards New York foreign business registration is fulfilling the mandatory publication requirement pursuant to NY LLC L § 802 (2020). According to this state law, a foreign LLC must publish a copy of the application for authority in two different newspapers. The copies have to be published within a period of 120 days since the filing of New York LLC foreign registration. It is important to note that the newspapers for publishing have to be designated by the office of the county clerk in the county the entity is located. You will be required to submit affidavits of publication of the newspapers to the New York Department of State, Division of Corporations.

Need Any Assistance in Applying for New York Foreign Qualification?

If you already own a business in any other state except New York and want to conduct business in New York then you will be required to apply for a foreign qualification in New York. As one of the leading New York registered agents, IncParadise can assist you with the process of New York foreign business registration.

Starting a Small Business in NYC

New York is home to 2.3 million small businesses and this includes every form of business right from home-based businesses to e-commerce, mom-and-pop corner stores, IT startups, and financial firms. Small businesses account for a greater slice of the market with its existence in almost every industry sector in the state. You can start a small business in NYC in some of the top industries like trade, financial activities, manufacturing, professional services, leisure activities, and information technology among others.

Is New York an ideal place to start a small business?

If you are planning to start a small business in NYC then it will be a favorable decision for your company. This is more so as the state promises opportunities, a good startup environment, innovation hubs, and logistics infrastructure among others. The gross domestic product (GDP) of New York is $1.7 trillion, which makes it the third-largest economy in the nation and right behind Texas and California. If you want to set up a company in the state and are wondering how to start a business in NYC with no money then it is important to identify the advantages and benefits it offers. These include:

• Talent pool – The success of every small business in New York can be attributed to its employees. When you start a small business in NYC, one of the major benefits is that you will have access to a skilled talent pool. You will be able to hire professionals with strong skill sets, experienced and committed individuals, and even be able to recruit cream talent right out of college.
• Diverse industries – New York is home to diverse industries that provide the platform and opportunities for small business ideas in New York to grow into a highly profitable business. The top industry is the financial services sector, which is synonymous with the New York Stock Exchange (NYSE). This sector has generated $429 billion and is followed closely by healthcare services. Some of the other sectors where you can start a small business in NYC include professional and business services with a contribution of $195 billion to the GDP of New York, retail trade ($64.5 billion), and manufacturing.
• Financial Assistance – If you are wondering how to start a business in NYC with no money then the state offers several opportunities, tools, and programs targeted at providing financial assistance. Different types of businesses have different startup costs and the state provides several options to choose from. You can opt for government grant programs like the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR). The state also attracts venture capitalists with fintech startups raising $39.2 billion.

Low cost & profitable small business ideas in NYC

New York is one of the favored destinations for entrepreneurs as well as venture capitalists. The state is undergoing an era of heightened venture capital activity and startups with small business ideas in New York have become an integral part of the startup ecosystem. If you plan to start a small business in NYC then one of the important aspects to consider is the industry as some sectors attract more investors, incubators, and accelerators as compared to other sectors. Let’s take a look at some of the trending small business ideas in NYC.

• Webpreneur – One of the ideas that belong in starting a business in NYC in checklist form is ‘Webpreneurship’ also known as Digital Entrepreneurship. This is considered a low cost startup idea as you will be conducting most of your business online. You can become a webpreneur and work from your home or even from co-working spaces. As a webpreneur, some of the areas to focus on include web design & development, internet marketing, content creation, programming, and software development among others.
• Homemade meal delivery – Homemade meal delivery is considered a profitable business in New York as these services focus on a customer oriented menu that can be delivered right to the doorstep. Today, there are over 260 Food Tech startups in the state that focus on providing healthy food with choices ranging from vegan to plant-based seafood substitutes.
• Handmade Products – One of the areas that should be in your starting a business in NYC checklist is handmade crafts. Entrepreneurs and home-based businesses are actually converting their hobbies into a profitable business in New York. If you want to explore your artistic side then some of the handmade crafts that you can indulge in include jewelry designing, making ceramics, scented candle making, soap making, handbag designer, woodworking, furniture upcycling, floral artists, mural artist, custom calligraphy services, and t-shirt designing among others.
• Internet based businesses – One of the sectors that has been making waves in New York and globally is the computer or IT related businesses. This is one idea that should be on your starting a business in NYC checklist as there are several areas that you can focus on depending on your resources and budget. If you have been thinking about how to start a business in NYC with no money then food blogging, travel blogging, and vlogging are areas that you can explore. Some of the other areas and services that are trending include computer tutor, desktop publishing, computer repair, IT consulting, app development, and even launching an e-commerce store.

Steps to Start a Small Business in NYC

If you are wondering how to start a small business in NYC then it is important to first identify the business idea and the market you want to launch in. There are several processes that will be involved towards turning your idea into a profitable business in New York. These processes vary from the creating a business plan to securing funding and registration of the business. Let us look at the key areas that you will need to focus on in order to achieve success.

1. Prepare a small business plan

A well written business plan can turn your idea or innovation into a profitable business in New York. Essentially, a business plan is a strategic tool that an entrepreneur or small business owner can use to identify the various requirements of the startup right from the conception phase to the operational stage. A good strategic plan will help you in identifying targeted markets, competition, startup costs, and long-term objectives. If you plan to start a small business in NYC then some of the key areas of the plan are:

• An executive summary of your small business
• An objective statement defining business goals
• The legal structure of your business
• Startup Expenses
• Research of the market to launch in
• Existing and expected competition
• Identification of targeted customer
• Products and services you are planning to offer
• Marketing and sales strategy
• Financial projections

2. Register your business

One of the important aspects of starting a business in NYC in checklist form is registration of your business. The new business formation process, documentation, and filing fee vary according to the legal structure of the entity as chosen by you. It is also important to note that the process and documentation for registering a domestic entity is different from that of a foreign entity. Let’s look at an example to make it simpler.

Example: If your small business ideas in New York revolve around forming a single owner startup then you can opt to form a sole proprietorship or a single member LLC. A sole proprietorship business is not required to register with the state but if you form a Limited liability Company (LLC) then you will be required to file the Articles of Organization with the Department of State pursuant to Section 203 of the New York State Limited Liability Company Law. The filing fee for an LLC will be $200.

Start a small business in NYC Today!

3. Secure funding for business

If you want to know how to start a business in NYC with no money then the first step towards it is to identify ways to secure funding. It is no secret that even a startup from home will require capital for making the business operational. You have to first determine how much funding your business will require. A business plan will help you to create the budget for the same. So how do you arrange for startup finances? One of the best options is to identify the various small business grants and related funding opportunities in NY.

4. Check for business license, permits and zoning requirements

If you are planning to start a small business in NYC then there are several state requirements that the entity has to fulfill to maintain a good standing. One of the key requirements is getting a business license or permit. The license or sales permit will help a new business to conduct its operations in the state. IT is required by both domestic and foreign entities. The type of license required will often be dependent on the industry or business activity. If you want to start a company with your small business ideas in New York then you can choose from three different types of licenses, which are:

• Industry based licenses like a manufacturing industry or tourism sector
• Occupational licenses for professional skills like a certified public accountant
• Local licenses, which are issued by the city or county your business is based in like in Manhattan or Brooklyn.

Do you want to know more about business licensing in New York?

5. Open your small business

Once you have registered your business and obtained necessary licenses and permits, the next step is to start conducting business. One of the important things to remember is that in order to start a small business in NYC, you need to have your marketing strategy in place. The more customers you reach with minimal marketing expenses, the higher the probability of making a profitable business in New York will be.

Need Any Help in Forming Your NYC Small Business?

In order to start a small business in NYC, you will need to determine the right business structure. A business structure plays an integral role when it comes to taxes, availability of secure funding, venture capital, the documentation required for new business registration process, and annual maintenance.

Doing Business in New York

Home to the two largest stock exchanges globally, New York is a dream market for small businesses. The state has an unparalleled economy boasting a gross state product of US$1.9 trillion in 2021. NY State is considered the 10th largest economy in the world and offers everything an entrepreneur needs right from top accelerators to crowd-sourcing innovation platforms and New York state small business incentives for startups. There are several industries in which doing business in NY State can be highly rewarding including banking, finance, and communication.

Why is New York State a good place to do business?

New York is considered one of the best places to form a startup especially because of the funding options available including New York small business grants. Of course, there are numerous other benefits of transacting in a state that enjoys a robust infrastructure and vibrant economy. If your long-term goals are business growth and expansion then this is the state to conduct your business in as you can reach out to local as well as global customers with ease. There are several factors that contribute to the fact that doing business in NY State is beneficial to any form of business. Some of the factors and top advantages are:

• A Strong Innovation Ecosystem – New York boasts of a robust and resilient tech ecosystem that has taken the state rankings to #2 and right on the heels of Silicon Valley. The technology sector is valued at $147 billion and according to the 2020 Global Startup Ecosystem Report (GSER); NY has the second best startup ecosystem in the world. The state also attracts both funding and acquisition thus ensuring doing business in NY State is lucrative and growth oriented.
• Deep Talent Pool – New York is home to 2.3 million small businesses and 4.1 million small business employees. Whatever your business may be, you will always require employees to handle specific areas of your company. This is one of the reasons entrepreneurs prefer New York as it is home to one of the largest talent pools. A survey reveals that 44 percent of New Yorkers have a college education and the state also attracts talent from surrounding states and cities including Boston (Massachusetts) and Washington D.C. In fact, there are New York state small business incentives targeted at employment like the Employment incentive credit (EIC), which provides tax credits to new businesses. Some of the top universities in New York adding to the existing talent pool include Columbia University, New York University (NYU), and Cornell University among others.
• Robust Infrastructure – One of the factors integral towards doing business in NYS is infrastructure. This includes commercial space, transportation, and logistics. The state has been making strategic investments towards modernizing their rail and maritime assets along with the creation of new distribution facilities with the objective of providing a resilient and sustainable logistics network. The state also has an established Foreign Trade zones program (FTZ) that provides special status like duty elimination to foreign imports. The FTZ is a part of the New York state small business incentives programs and caters to a wide variety of industries like construction, pharmaceuticals, fashion, food production, green tech, and luxury goods.
• Tax Benefits and Incentives – Taxes can be financially draining for new and small businesses. If you plan on doing business in NY State then one of the advantages you or your business can enjoy is the tax incentives or benefits. There is a wide variety of New York state small business incentives programs including different types of tax credit programs. The tax credits are available according to industry, regarding employment, job creation and workforce training incentives, commercial tax credit programs, and opportunity zone programs among others.

Small Business Incentive Programs and Grants in New York

If you are planning to form a startup in New York then one of the advantages you will enjoy is access to a wide range of New York small business grants and incentive programs. The importance of these grants and incentives can be established in the very fact that whatever the type or size of business, there is an initial cost of formation and operation. Sometimes this cost can be higher than what you had worked out in your business financial plan and the inability to meet such costs can negatively impact business operations. This is where New York grants for a small business and incentive programs can help in offsetting short-term as well as long-term operational costs.

Tax Based Incentives

There are different types of New York small business grants and incentive programs administered by state agencies as well as the Federal government. The incentives can be categorized according to the industry, business activity, financial relief programs, and tax credits. One of the most popular business incentives apart from New York grants for a small business is the tax based incentive programs. You can qualify for these incentive programs after you form or register your company in New York. Let’s look at some of the top tax-based incentive programs in the state.

• Commercial Tax Credit Program – The New York State Commercial Tax Credit Program has been specifically designed for increasing commercial film production in the state. It is a form of New York state small business incentives program that allocates credits of up to $7 million each year. As an applicant or new business, you can receive a credit of almost 30% on production expenses that qualify under this program. This program is also known as the Empire State commercial production credit program and you will be issued an allocation certificate by the New York State Governor’s Office of Motion Picture & Television Development.
• Life Sciences Tax Credit Program – The Life Sciences Research and Development Tax Credit Program as it is known is different from a New York small business grants program. This program has been specifically designed for supporting companies that are locating, commercializing, inventing, and producing in the life sciences department in the state. Through this program, you can get credits of up to $10 million each year. The credit provided is 15% for any company that employs 10 or more people and 20% for any company employing less than 10 people. The program is being administered by the Empire State Development and you will have to file the New York grant application for tax credits also known as Form CT-648 or Form IT-648.

Are you planning to start a New Business in New York?

Investment Funds

If you have recently launched your business in New York and are looking for finance options then New York small business grants like investment funds can be quite helpful. An investment fund is basically a supply of capital that belongs to multiple investors and is used for collectively purchasing securities where-in each investor retains control and ownership of his/her shares. New York investment funds provide much broader selections in terms of investment opportunities and new businesses can leverage this. Some of the most common investment funds include exchange-traded funds, mutual funds, hedge funds, and money market funds.

Innovate New York Funds

If you plan on doing business in NY State then the Innovate NY Fund can be quite beneficial. It is a type of seed stage business equity fund that has been designed to provide investment capital to business owners and managers across the state. This type of New York small business grants are used primarily for investment in seed-stage businesses that support innovation, employment or job creation, and high-growth entrepreneurship in this state. This program is supported by a grant of up to $35.6 million from the US Department of Treasury and up to $10.3 million from Goldman Sachs.

Minority and Women-Owned Business Investment Funds

The Minority and Women-Owned Business Investment Funds (MWBE Fund) is one of the best forms of New York grants for a small business. The primary objective of this grant is to provide financial assistance to minority and women-owned business enterprises (MWBE) in the state of New York. The fund also supports programs and projects that assist the overall entrepreneurial development amongst minority people and women in the state. The MWBE is a New York small business grant that provides funding through:

• Incubator assistance
• Direct financial assistance
• Lending through joint efforts with the local, community as well as regional entities
• Lending for eligible government contractors and certified government contractors
• Technical assistance

New York Ventures Direct Fund

Seed funding for small businesses is one of the most difficult to find and this is where the New York Ventures Direct Fund can be quite helpful. It is targeted at small business owners with funds available worth $100 million. You can file a New York grant application for this fund if your business is specializing in the emerging technology field. The seed investments for each startup can vary from $500,000 to $1.5 million.

Innovation Technology Commercialization Funds

The Innovation Technology Commercialization Investment Fund is also known as the “Innovation TC Fund” and it is focused on helping small businesses have access to investment capital. This type of New York small business grants is targeted at pre-seed stage companies across the state. Some of the participating investment entities include Accelerate NY Seed Fund, Z80 Labs Innovation TC Fund, and Z80 Labs Innovation TC Fund among others. The funding amount of New York grants for a small business through the Innovation TC Fund can vary according to the investment partners like the CenterState Growth Innovation TC Fund awards up to $150 million in capital grants.

Venture Capital – New York Ventures

If you are a first time entrepreneur searching for New York small business grants then venture capital through New York Ventures is a good option. New York Ventures invests in entrepreneurs and small business owners from diverse backgrounds whose objectives focus on using innovative technology to solve a variety of large-scale problems. The sectors primarily targeted are Health Tech and Life Sciences, Climate Technology, Advanced Manufacturing, Ag-tech Systems, Data, AI, SaaS, and other technologies. The state provides $100 million to a direct investment fund, which is used to provide financial support to seed and series A rounds. You don’t need a New York grant application to qualify for venture capital; instead, send them your investment presentation for a review.

Ready to Start a Business in New York?

Every business requires financial assistance in the form of startup capital when it comes to establishing business operations, New York state small business incentives and grants play a key role. In order to qualify or apply for these grants and incentives, you have to register your business in the state and this is where IncParadise can assist you.

New York Business Tax

Once you register or incorporate a new business in New York, you will be required to file New York business tax returns annually. When we talk of business taxation, it essentially refers to taxes that any existing or new business has to pay as a part of their business operations in the said state. As a business owner or a company, the type of taxes can vary and a single organization might need to file multiple taxes. As an example, a newly incorporated company may have to file New York corporation taxes as well as sales and use tax. It is also important to note that you need to apply for and obtain an Employer Identification Number (EIN) from the IRS as this will assist you in filing tax returns

What taxes do businesses pay in New York?

Whether you form a sole proprietorship, an LLC ,or a business corporation, each type of entity will have different tax statuses. If you are planning to start a small business then managing your New York business tax is one of the several expenses that your company might need to undertake. The amount of tax applicable for your business will depend on the type of tax and can often require the use of a New York business tax Calculator. There are three categories of taxes essentially and they are federal, state, and local taxes and the amount of tax you pay will be considered as your tax liability. Let’s try and understand the different taxes applicable to businesses in the state of New York.

Franchise tax

Different states have different types of taxes and one of the common forms of taxes is the franchise tax. There is franchise tax in New York apart from some other states including Georgia, Texas, Illinois, and Mississippi among others. In the state of New York, the franchise tax is also known as the corporation franchise tax and it is applicable to both the traditional C Corporations and S corporations. This type of New York corporation tax is applicable to both domestic and foreign business entities. Corporate taxpayers in the state of New York have to pay taxes equal to the highest amount as calculated considering three types of tax bases in addition to the Metropolitan transportation business tax (MTA surcharge). These are:

• Business income
• Capital base
• Fixed dollar amount

• Income from any non-New York bonds
• Royalty payments made to related parties
• Depreciation adjustments

NY State income tax

One of the important taxes that may apply to your business is the income tax. This is a type of New York business tax that is payable on the income derived by you or your business in the state. This also includes a form of tax that is known simply as the filing fee or an estimated income tax and is applicable to LLCs, limited liability partnerships (LLPs), and some regular partnerships.

NY State sales tax

One of the most important forms of business tax apart from the franchise tax in New York is the sales tax. It is also often known as the sales and use tax. The NYS sales tax is applicable to companies that are involved in the retail sales of certain tangible personal property as well as services. The use tax on the other hand is applicable if you or your business is buying specific tangible personal property or services outside the New York state but are planning to use it within the state.

How New York Businesses are Taxed?

If you are thinking of starting a new business in New York then you need to consider the taxes applicable in the state. There are different types of taxes including franchise tax in New York and these taxes vary from one form of business to another. Some businesses may need to file only NYS income tax while others may need to file multiple taxes like New York LLC taxes may not be applicable for sole proprietorships or corporations. Let’s look at the different types of entities and their taxations.

Taxes for LLC

A New York LLC is considered similar to S corporations when it comes to taxes. A Limited Liability Company enjoys pass through taxation, which means that the income earned is passed through to the owners or members and they are required to file a personal income tax return on it. This is one of the types of New York LLC taxes and the rate can vary from 4.00-8.82%. You will be required to file a New York resident tax return or Form IT-201 and if you are a non-resident then you will be required to file Form IT-203.

Example: If the gross income of your New York LLC is less than $100,000 then the NY LLC filing fees would be $25. If the gross income is over $250,000 but under $500,000 then the fee is $175 and for incomes more than $25,000,000, the fee would be $4,500.

Taxes for C Corporation

A C corporation is a traditional corporation and it will be subjected to a franchise tax in New York. This type of tax is also known as a privilege tax, which you essentially pay to conduct business in this state. In order to calculate and pay franchise taxes, you will need the help of a New York business tax Calculator and fill out Form CT-3 or New York corporate tax return.

• The tax on business income – This is known as the federal taxable income (FTI) and will be the starting point for calculating your New York corporation taxes using business income. The rate for most businesses is 6.5% although a lower rate of 4.875% may be applicable if your entity is considered a qualified emerging technology company (QETCs).
• The tax on capital – This type of tax is based on the total business capital base, which is considered as the fair market value (FMV) of all your assets as well as investments owned by the business in New York State. The New York corporation taxes rate for most businesses is 0.025%.
• The fixed dollar minimum tax – This tax is also used for the calculation of franchise tax in New York. The tax is calculated based on New York State receipts or money earned while conducting business in this state.
  

  Example: If the total New York receipts for your company are less than $100,000 then the fixed dollar minimum tax will be $25. Similarly, if the total New York receipts are more than $25,000,000 but less than $50,000,000 then the fixed dollar minimum tax will be $5,000.

Taxes for S Corporation

If you plan to form an S Corporation in New York then for tax purposes, it enjoys pass through taxation. This simply means that the income earned by the company will be passed through to the owners or directors and they will be required to file a personal income tax return on it. The rate of New York business tax on personal income will vary from 4% to 10.9%.

Taxes for Sole Proprietorship

A sole proprietorship is also known as a sole trader business and comprises a single owner. It is an unincorporated business where New York business tax is paid as personal income tax on the profits earned by the company. The personal income tax rate varies from 4% to 10.9% in the state. If you are a New York resident then you will need to file the returns using Form IT-201 and non-resident or part-year resident owners will have to file taxes using Form IT-203.

Taxes for Partnerships

There are different types of partnerships that you can form in New York including a limited liability partnership (LLP) and general partnership. As a rule, a partnership doesn’t pay any income tax or New York business tax directly on its income. Instead, the income is passed through to the partners and has to be filed in the income tax return or franchise tax return of each partner. You will be required to file Form IT-204 for Partnership Return. A Partnership company may also be required to file an annual filing fee and pay estimated income tax on behalf of specific partners.

Ready to Incorporate your New York Company?

Whether you are planning to form a limited liability company (LLC), or a C Corporation in New York, the new business formation process can be quite extensive, and time consuming. This is where IncParadise can provide meaningful assistance as we are an expert incorporation service provider in New York and help to register your LLC or corporation in New York.

Doing Business As or DBA in New York

New York is home to 2.3 million small businesses, which includes LLC, corporations, sole proprietorships, and partnerships among others. Many of these businesses apply for a New York DBA online in order to conduct or transact business in this state. The filing of a DBA by domestic and foreign business entities is governed by Article 9-B of the 2020 New York Laws, GBS – General Business. If you are planning to get a DBA in New York then your business name needs to be compliant with the requirements of section 130 of the General Business Law. The important thing though is to understand what a DBA is and whether your business needs it.

What is a DBA in New York?

If you want to start a small business in New York, you will first need to identify a name that is distinct and stands apart. If you are thinking of using such a name then filing a DBA in New York can be a good option. You are probably wondering how a DBA is different from any business name and the answer lies in the fact that a DBA will help you conduct business in the state under a fictitious business name. Such a name has several advantages over using your own name.

Example: If you are planning to start a sports goods store in New York and if you are the owner, you can name it with your name like Jaden Smith sports. In such a scenario, you will not be required to apply for a New York DBA online since you are using your own name. If you were to name the store Jaden’s Soccer Store then you will have to get a DBA in New York.

When do you need a DBA in New York?

A business name is important to any company and if you are wondering how to find a DBA in New York or file such a name then it is important to understand if your business really needs a fictitious name. The reason to opt for a DBA can vary from one business to another. Some of the common reasons for filing a DBA in New York are:

• Type of business entity – Every business has a true name or a legal name. Some forms of businesses, especially unincorporated business structures like general partnerships and sole proprietorship businesses, the legal name is the name of the business owners. Most often than not, these businesses prefer to get a DBA in New York instead of using the owner’s name.
• Several businesses – When you form a new business, the primary objective is to achieve growth. When a single business expands, it can branch off into multiple businesses depending on the products or services being offered. In such a scenario, you can apply for a New York DBA online to help in keeping each of the businesses separate and also avoid the need to register each company.
• Business Bank Account – While opening a business bank account you need to check the bank account opening requirements. There are many banks that require a copy of your DBA (doing business as) or assumed name certificate in New York for opening a business bank account.

Filing a DBA in New York for an LLC and a Corporation

If you are planning to start a new business in New York as a Limited Liability Company or a corporation then identifying a business name is the first step of the process. If you plan to conduct business with a name that is different from the name you have used for business formation then such a name is known as a trade name. A trade name is nothing but an assumed name or DBA (doing business as) is important. There is a process for filing a DBA in New York for an LLC or a business corporation and this process is different from that of the normal name reservation for businesses.

Do New York Assumed Name Search

The first step towards filing a DBA in New York is to conduct a name search. If you are wondering how to find a DBA in New York then there are two ways to conduct this name search and they are:

• Search through the corporation and business entity database of the Department of State, Division of Corporations
• Conduct a search for similar trademarks using the trademark database also known as Trademark Electronic Search System (TESS)

File an NY Assumed Name Certificate

Now that you know how to find a DBA in New York, the next step is to ensure that you are able to apply for a New York DBA online. It is important to understand that there is a specific reason or purpose for registration of a DBA name. The purpose is to basically notify your customers or the public regarding a specific person or company conducting business under a name that is different from its legal name. The registration of the DBA is governed by the 2020 New York Laws, GBS – General Business, Article 9-B – Use of Names and Symbols.

• New York Department of State,
• Division of Corporations,
• One Commerce Plaza,
• 99 Washington Avenue,
• Albany, NY 12231

Managing a New York DBA

Filing a DBA in New York means that now you can conduct your business in the state using the DBA or assumed name. Every state has its own DBA rules and regulations, especially those related to the renewal of DBA, changing, and canceling a DBA. If you have applied for an assumed name certificate in New York then let’s look at the processes applicable in the future.

How to renew NYS DBA?

Unlike in some of the other states in the USA, once you apply for a New York DBA online, the process ends there. This simply means that you are not required to renew the fictitious name anymore. This trade name will belong to you until you change or cancel the DBA or you close the business.

How to change a NY State DBA?

After filing a DBA in New York, you will be able to conduct under the said name. Now, if in the near future, you want to change or alter the fictitious name then, are there any ways you can do it? Yes, it is possible. You will be required to file a Certificate of Amendment for the assumed name certificate in New York. The filing of the Certificate of Amendment is governed by Section 130 of NY General Business Law. There will be a filing fee of $25 for this amendment and you can even expedite this process by paying an additional fee.

How to cancel NYS DBA?

Once you get a DBA in New York, is there any way to cancel the assumed name? There could be a plethora of reasons why a business or a business owner would want to dissolve or cancel their fictitious or trade name. If at any given point in time, you want to withdraw your DBA then it is definitely possible. There is a process for the same and it will require you to submit a Certificate of Discontinuance of Assumed Name. You will have to submit this certificate with the New York Department of State, Division of corporations along with a $25 filing fee. If your filing a DBA in New York was with the county then you will need to contact the said county clerk for instructions related to withdrawing the New York DBA.

Need Any Assistance in Filing New York DBA?

The process to apply for a New York DBA online may require you to provide accurate information while ensuring there is no trademark infringement. If applying for a DBA or conducting a search to get a DBA in New York seems like an intricate process then IncParadise will gladly assist you with the process. We have expertise and knowledge regarding the New York General Business Laws and can help you to get your New York DBA.

Sole Proprietorship in New York

A sole proprietorship business is not just the simplest but one of the oldest forms of business. If you are planning to start a sole proprietorship in New York then this is one state that provides everything from the right business climate to some of the best startup accelerators and incubators. The state is home to 2.3 million small businesses and offers a wide variety of incentive programs to sole proprietorships and other forms of small businesses.

What is a sole proprietorship in New York?

In order to start a sole proprietorship in New York, there are several aspects you have to consider like creating a proper business plan or getting a tax ID, or even obtaining the necessary business license. A sole proprietorship business as the name suggests consists of a single owner of the business. This type of business is also known as individual entrepreneurship, sole tradership, or just proprietorship. As a sole proprietorship business, it doesn’t have to be a one-man show as you can always hire employees. You can also form a sole proprietorship in NY online or offline.

Pros and cons of sole proprietorship in New York

A sole proprietorship is considered as an unincorporated business entity and because it is a single-owner type of business structure, the business and the owner are considered the same. There are several advantages that make it beneficial to file a sole proprietorship in NY State. This form of business also has certain disadvantages as compared to other business structures. So, let’s look at the pros and cons of a sole proprietorship.

Pros

• Simple and easy to form – This type of business formation doesn’t require much paperwork and you are not required to register the business with the New York Division of Corporations as compared to other business structures like LLC or a corporation.
• Lower cost of formation – You can start a sole proprietorship in New York with ease and even from your home or any commercial space or even a co-working hub. You can form a sole proprietorship in NY online or offline and have less capital requirements as well as lower annual compliances.
• Management decisions – Since this form of business is run by a single owner, all operations as well as management-related decisions will be made by the sole owner without any interference.
• No sharing of Profits – The profits earned by the business after you start a sole proprietorship in New York, will go to the owner or sole proprietor. Unlike some of the other forms of businesses, it is not split amongst members, partners, or shareholders.
• Simpler tax – When you form a sole proprietorship in NY online, you will not be required to file tax returns separately for your business. Instead, you will report the income earned on your own personal tax return.

Cons

• Unlimited liability – If you start a sole proprietorship in New York then the business and owner will be considered the same and hence there will be unlimited liability where debts are concerned. There will be no legal distinction between business and personal assets.
• Decision making – There are several advantages of being the sole owner but there is a disadvantage too. As the owner, you will be responsible for making all decisions as well as the operations and this can be tedious.
• Difficult to raise capital – When you form a sole proprietorship in NY online, one of the biggest disadvantages is raising capital. If you require startup capital or want funds for expansion it will be difficult to raise capital unlike in corporations where you can sell stock.
• Liquidation – One of the biggest disadvantages when you start a sole proprietorship in New York is liquidation. If the business owner passes away then unlike a corporation, the business will be liquidated.

Steps to Start a Sole Proprietorship in New York

If you want to start a business without any partners, all by yourself then it is time to file a sole proprietorship in NY State. The state of New York has different requirements for this type of a business structure and as the owner you will be required to fulfill them or be compliant with them. If you are wondering how to start a sole proprietorship in NY then just like any other form of business, there are several aspects and processes to consider. Let us look into these processes in detail as they will enable you to help set up the business and run it smoothly.

1. Prepare a business plan

A business plan is one of the most important areas to focus on before you file a sole proprietorship in NY State. A business plan is considered to be a strategic plan that encompasses marketing, sales, and finance. The role of a business plan is to help you identify the various aspects and areas of a business that you should prioritize. The process of preparing this document will require you to conduct in-depth market research, which will help in not only developing your business idea further but assist with how to start a sole proprietorship in NY, implement good practices and achieve higher growth and sustenance. Some of the components of a good business plan for a sole proprietorship include:

Components of a Business Plan

• Statement of Purpose (Mission Statement)
• Description of the Business
• Products or Services
• Personnel and management
• Insurance
• Methods of Record Keeping
• Marketing Plan
• Competition
• Methods of Distribution
• Summary of Financial Needs
• Financial goals and projections

2. Choose an NY business name

One of the important processes before you file a sole proprietorship in NY State is to identify a business name. It is important to ensure the name of your sole proprietorship is creative and distinct. Here are some tips that will help you in choosing a New York business name:

• Keep it as simple as possible and it should be easy to pronounce
• The business name should represent your business, products, or services
• Try to pick a name that is not limiting as your business may expand or grow in the future
• Conduct a business name search over the internet to get an idea
• Try choosing a name that conveys meaning and sounds positive
• Once you have identified a name, conduct a copyright or trademark search
• It is also important to ensure the availability of a domain name

3. Form the sole proprietorship

If you are planning to start a sole proprietorship in New York as a domestic or foreign entity then you will be required to file a Certificate of Assumed Name pursuant to NY Gen Bus L § 130 (2020). An assumed name is known as a New York DBA (Doing Business As) or a fictitious business name and without this, you will not be able to transact business in this state. You will have to file the Certificate of Assumed Name with the New York Department of State, Division of Corporations along with a $25 filing fee.

Do you want to form a sole proprietorship in New York?

4. File fictitious business name

Normally, sole proprietorships use a DBA also known as an assumed name as the business is not a separate legal entity from the owner. You will need to file a New York DBA only if you don’t want to conduct business under your own name.

For example: If an individual named Claude James wants to start a sporting goods store in New York, he can simply use his own name ‘Claude James.’ If he wants to name it Claude’s Sporting Goods and wants to do business under this name then he will need to file a New York DBA.

• You need to identify a name like Claude’s Sporting Goods depending on the primary business activity
• The business name should be kept simple and also relate to the product of services being offered like Mannie’s TV Repair
• Once you have identified a business name, you need to also conduct a New York DBA name search with the Trademark Electronic Search System (TESS) of the U.S. Patent & Trademark Office

5. Get an EIN

An EIN or Employer Identification Number is also known as the Federal Employer Identification Number (FEIN). It is a unique number that is assigned by the Internal Revenue Service (IRS) to business entities. If you file a sole proprietorship in NYS then ideally you will be filing taxes on your personal tax returns and hence will need a Social Security number (SSN). There are instances in which a sole proprietorship may be required to apply for and obtain an EIN. Such instances according to the IRS are:

• If the sole proprietorship business has employees
• If you have a Keogh plan
• As the owner, if you are going to be filing tax returns related to Employment, Excise, Tobacco, Alcohol, and Firearms
• If you form a sole proprietorship in NY online and it is categorized in special types of organizations like Non-profits, cooperatives, and Estates among others.

You can apply for an Employer Identification Number (EIN) before or after you file a sole proprietorship in NYS.

6. Obtain the necessary licenses and permits

Once you start a sole proprietorship in Texas, one of the foremost requirements is that of a business license. It is important to note that the state of New York does not require a license or permits to operate a sole proprietorship business but some professions may require state licensing. Some of the professions that require licensing after you form a sole proprietorship in NY online include:

• Legal
• Banking
• Architecture
• Pharmacy
• Insurance
• Public Accountancy
• Interior Design
• Athletic Training
• Dietetics-Nutrition
• Clinical Laboratory Technology
• Medicine
• Veterinary Medicine
• Social Work

7. Open a bank account for your New York business

A sole proprietorship business as the name suggests has a single owner. The taxes are also filed on the personal income tax return of the owner. Hence, it is very important to keep your personal gain and revenue generated by the business separately. This is possible if you start a business bank account. You can open this separate account before or after you start a sole proprietorship in New York.

• A business account will keep your business finances separate
• A checking account will keep your payments received or sent organized
• It will also organize accounting records and thus ensure a clear audit process
• It will ensure easy filing of your tax return
• Depending on the bank, you will be able to leverage overdraft protection

8. Report and pay taxes

When you file a sole proprietorship in NY State, you have to keep in mind that for tax purposes, you and your business are the same. As a result, you will not be required to file tax returns separately for your business. Instead, you will have to report the income earned through your personal tax return. You have to report all income earned during a year to the New York State Tax Department using a Federal 1040, Schedule C, Profit or Loss from Business (Sole Proprietorship) form.

Ready to Start a Sole Proprietorship Business in New York

A sole proprietorship is one of the simplest forms of businesses that you can start. It is a type of unincorporated entity and you can start a sole proprietorship in New York without having to register with the Division of Corporations, NY State Department. If you are wondering how to start a sole proprietorship in NY then IncParadise can provide you assistance regarding the formation of your new business in NY.