Starting a Business in New York State

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Starting a Business in New York State Powered By Docstoc
					                                                                             Introduction                                          Sole Proprietorship
Governor's Office of
                                                         This pamphlet contains general information for             The simplest form of a business structure owned by
                                                         starting a business. Use this brochure as a reference      one individual is a sole proprietorship. All business
Regulatory Reform                                        guide for general business requirements but not as         responsibilities and decisions are those of the single
                                                         legal or financial advice.      Filing fees and tax        owner. The owner of a sole proprietorship has
(GORR)                                                   information were current on the date of publication,       unlimited liability for the business.

                                                         but you should verify them prior to finalizing your        Form: Certificate of Conducting Business as a Sole
                                                         business plans. We suggest you discuss your                Proprietor.      Purchase this form from a legal
P.O. Box 2107                                            business plans with an attorney and/or accountant.         stationery store in New York, through Blumberg
                                                                                                                    Forms at 800-529-6278, or through their website at
Albany, NY 12220-0107                                               State Licenses or Permits             
                                                         Some businesses require specific New York State            Complete and notarize the form, then file it with the
                                                         permits. The Governor’s Office Regulatory Reform           county clerk in each county where the business is                                     (GORR) defines a permit as any required license,           located. You usually need three copies: the original
                                                         registration, or similar form of authorization required    for the county clerk, one for the bank to open an
                                                         by New York State. Examples of businesses                  account, and one for the business.
                                                         requiring permits are: motor vehicle repair shops,         Fee: $25 plus $4-$5 for each certified copy. (The
                                                         beauty salons, food establishments, real estate            filing fee in the five counties within New York City is
                                                         sales, and child day care centers. For assistance in       $100; certified copies are $10.)
User-Friendly Online                                     identifying New York State permit requirements,
                                                         contact:                                                                       Partnership
Permit Assistance &                                        Governor's Office of Regulatory Reform
                                                                                                                    A partnership is the relationship between two or
                                                                                                                    more persons or companies that carry on a trade or
Licensing:                                                   Business Permit Assistance Unit
                                                                            P.O. Box 2107
                                                                                                                    business together. In the absence of a partnership
                                                                                                                    agreement, the NYS Partnership Law sets forth the
                                                                    Albany, New York 12220-0107                     rights and duties of the partners.
                                                                    800-342-3464 or 518-474-8275                    Form: Certificate of Conducting Business as
                                                                                      Partners. Purchase this form from a legal stationery
                                                                                                                    store in New York, through Blumberg Forms at 800-
                                                                  Email:                   529-6278,         or    through     their   website    at
                                                                Permit Database:         
                                                                                                                    Complete and notarize the form, then file it with the
                                                                            Local Permits                           county clerk in each county where the business is
                                                         A person contemplating starting a business should          located. You usually need three copies: the original
                           David A. Paterson, Governor   be aware of local laws. It is important to contact the     for the county clerk, one for the bank to open an
                                                         village, town, or city and county clerk where the          account, and one for the business.
                                State of New York                                                                   Fees: $25 plus $4-$5 for each certified copy. (The
                                                         business plans to locate. Examples of local
                                                         considerations are zoning, parking, sign regulations,      filing fee in the five counties within New York City is
                                                         and certain occupational licenses such as                  $100; certified copies are $10.)
                                                         auctioneers, electricians, and plumbers. It is             Limited Partnership: A limited partnership consists
Personal Business                                        advisable to contact your local government first.          of one or more general partners with unlimited
                                                                                                                    liability for all obligations incurred by the partnership
Permit Assistance:          New York State                              Business Structures                         and one or more limited partners whose liability is
                                                                                                                    limited to the extent of his or her capital contribution.
                                                         The most common forms of business structures are:
                                                         sole proprietor, partnership, limited liability company,   Form: Certificate of Limited Partnership filed with
                          Governor's Office of           and corporation. If you plan to conduct business           the NYS Department of State, Division of
Toll Free: 800-342-3464                                  under a name other than your own, you must                 Corporations. NOTE: Limited partnerships must

Local:     518-474-8275
                          Regulatory Reform              register the name. Keep in mind that registration is
                                                         NOT permission to conduct business. The following
                                                                                                                    publish a notice in two newspapers in the county
                                                                                                                    where the business is located each week for six
                                                         contains a brief outline of the most common business       successive weeks specifying the details of the
Fax:       518-486-5869                                  structures.                                                limited partnership within 120 days after filing.
                                                                                                                    Fees: $200. (See Corporations for contact
Issued January 2009
                                                           may report income on personal tax returns.                   W. Averill Harriman Campus, Albany, NY 12227           800-829-3676 or INFORMATION: 800-829-1040 or
           Limited Liability Company                       Individual shareholders who wish to obtain this                  Forms: 800-462-8100 or 518-457-5431                visit:
A Limited Liability Company is an unincorporated           option must file federal Form 2553. Once the                  Information: 800-972-1233 or 518-457-5342
business organization of one or more persons               Internal Revenue Service grants approval, you must                 
having limited liability for the contractual obligations   file Election Form CT-6 with the NYS Department of                                                                  New York State requires all employers to provide:
and other liabilities of the business, other than a        Taxation and Finance.                                      Federal: For federal tax requirements, contact the       Unemployment, Workers’ Compensation, and
partnership or trust.                                      Not-for-Profit       Corporation:         Not-for-Profit   Internal Revenue Service for “The Small Business         Disability Benefits insurances as well as comply with
Form: Articles of Organization filed with the NYS          corporations cannot distribute assets, income, and         Resource Guide.” This guide contains general             wage reporting and withholding tax requirements.
Department of State, Division of Corporations. (See        profits to the benefit of the members, directors, or       information on federal tax obligations such as           The NYS Department of Taxation and Finance’s
Corporations for form information). NOTE: An LLC           officers except to the extent permitted by statute.        estimated taxes and self-employment tax, as well as      Publication NYS-50, “Employer’s Guide to
must publish a notice in two newspapers in the             The filing fee is $75 with the NYS Department of           various publications for starting a business. Refer to   Unemployment Insurance, Wage Reporting, and
county where the business is located once a week           State. You must obtain non-profit status approval          the “Federal (Employer) Identification Number”           Withholding Tax,” explains NYS tax responsibilities
for six consecutive weeks specifying the details of        from the Internal Revenue Service before requesting        section for contact information.                         as an employer.
the limited liability company within 120 days after        approval from the NYS Department of Taxation and
filing.                                                    Finance.                                                      Federal (Employer) Identification Number              Unemployment Insurance: An employer who
Fees: $5 for each name search, $20 for reservation         Foreign Corporation: The NYS Department of                 An Employer Identification Number (EIN), also            begins hiring employees to work in New York is
of name, $200 for Articles of Organization, $25 each       State authorizes an out-of-state corporation to            known as a federal tax identification number,            required to notify the NYS Department of Labor
for affidavits of publication.                             conduct business in New York. The basic filing fee is      identifies a business entity.          Generally, all    promptly to determine their appropriate tax status.
Tax Information: The NYS Department of Taxation            $225 and a certificate of existence or good standing       businesses need a federal tax identification number.     The conditions for liability differ among not-for-
and Finance’s Publication 16, “New York Tax Status         is always required from the jurisdiction that originally   An EIN is a nine-digit number that the Internal          profits,       government,        household/domestic,
of Limited Liability Companies and Limited Liability       organized the corporation.                                 Revenue Service assigns to a business. The IRS           agricultural, and all other employees.
Partnerships,” explains personal income tax and                                                                       uses the number to identify taxpayers that are
corporate franchise tax requirements and annual                        Contact Information:                           required to file various business tax returns such as                  Contact Information:
filing fees administered by the Department of               NYS Department of State, Division of Corporations         those for alcohol, tobacco, or firearms. Employers,                  NYS Department of Labor
Taxation and Finance. This publication is available                        518-473-2492                               sole proprietorships, partnerships, limited liability             Unemployment Insurance Division
online. Refer to the “Tax Information” section for                                       companies, and corporations (including "S"                  State Campus, Building 12, Albany, NY 12240
additional requirements and contact information.                                                                      corporations and not-for-profit organizations) as well            518-457-4179 or 1-888-899-8810
                                                                             Tax Information                          as other business entities use EINs.                         
                   Corporations                            New York: The NYS Department of Taxation and               Form: SS-4 Application for Employer Identification               To apply online:
A corporation is an entity separate and distinct from      Finance's Publication 20, "New York State Tax              Number
the individual(s) who own and manage the business.         Guide for New Businesses," provides basic                                   Contact Information:                    Workers' Compensation Insurance: Provides
A corporation can sell, buy, and inherit property in its   information about New York’s tax laws and                                 Internal Revenue Service                  protection to the employer from liability in the event
own name and is legally endowed with rights,               regulations. This publication outlines the procedures                           800-829-4933                        of an on-the-job injury resulting in employee
powers, and duties in the conduct of lawful activities.    to follow and forms to file with the NYS Department                                            disability or death and to provide monetary relief and
Business corporations operate for profit and can           of Taxation and Finance to fulfill tax obligations.                  To apply online:              medical benefits to the injured worker.           This
raise capital by selling shares of interest in the                                                                                                                             insurance is available through the NYS Insurance
corporation. A corporation's debts and obligations         Sales and Use Taxes: If your business will sell                      Employer Responsibilities                      Fund at 888-875-5790, through their website at
are distinctly its own.                                    tangible personal property or provide specific             The Federal government requires all employers to, or through a private insurance
Form: Certificate of Incorporation. Obtain this form       services in New York, the business is required to          have their employees fill out Form I-9 and Form W-4.     carrier. NOTE: Workers' Compensation is also
from the NYS Department of State, purchase it from         collect and remit NYS sales and local tax to the NYS       Federal employment taxes required are: Federal           available to sole proprietors or partners who have no
a legal stationery store in New York, have it              Department of Taxation and Finance, usually on a           Income Tax Withholding, Social Security and              employees.
prepared by an attorney, or apply online at                quarterly basis. Publication 750, “A Guide to Sales        Medicare Taxes (FICA), and Federal Unemployment                                          Tax in New York State,” has information on your tax        Tax (FUTA). The IRS’ Publication 15, “Circular E,        Disability Benefits Insurance: Provides for the
Fees: $5 for each name search, $20 for reservation         obligations and how to obtain a “Certificate of            Employer’s Tax Guide,” explains Federal tax              payment of cash benefits to employees who become
of name, $125 for Certificate of Incorporation, and a      Authority”. The NYS Department of Taxation and             responsibilities as an employer.                         disabled because of injuries or sickness that have
minimum tax of $10 to cover stock issuance.                Finance recommends filing for authority at least 20                                                                 no connection to their employment, and for
Tax Information: Corporations must file a franchise        days before providing taxable sales or services.           Form I-9, Employment Eligibility Verification, obtain    disabilities arising from pregnancies. Employers and
tax report and pay a franchise tax for all or part of      Apply online for a Certificate of Authority at:            this form from the U.S. Citizenship and Immigration      employees may pay for this insurance jointly or
each calendar/fiscal year the corporation exists.                                          Services at 1-888-464-4218 or             solely by the employer. This insurance is available
They must file federal tax returns. Refer to the “Tax                                                                                                                          through the NYS Insurance Fund at 866-697-4332,
Information” section for contact information.                           Contact Information:                          Form W-4, Employee’s Withholding Allowance               through their website at, or through a
S Corporation: Under Section 1362 of the Internal                 NYS Department of Taxation & Finance                Certificate, obtain this form from the Internal          private insurance carrier.
Revenue Code, certain small business corporations                       Sales Tax Registration                        Revenue Service. Call FORMS/PUBLICATIONS:

Description: Starting a Business in New York State document sample