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Business Incorporation in New York
Thinking of starting a business in New York? Incorporating a business offers legal protections, tax advantages, and funding opportunities that sole proprietorships often lack.
This guide explains the types of entities available, step-by-step incorporation procedures, required documents, associated costs, and the benefits of legal counsel in New York State.
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1. Business Incorporation in New York: Understanding the Concept
Incorporation is the legal process of forming a corporate entity recognized by the state.
In New York, a corporation is a separate legal “person” that can enter into contracts, own property, and sue or be sued.
Business Incorporation in New York: Common Entity Types
| Entity Type | Description |
|---|---|
| C Corporation | A standard corporation subject to corporate income tax |
| S Corporation | Pass-through taxation to avoid double taxation, with ownership limitations |
| LLC (Limited Liability Company) | Offers flexibility and limited liability protections |
| Professional Corporation | For licensed professionals such as doctors or attorneys |
| Non-Profit Corporation | Organized for charitable, educational, or religious purposes |
Each type affects how your business is taxed and managed.
2. Business Incorporation in New York: Reasons to Incorporate
New York business owners incorporate for many reasons, from tax optimization to risk reduction.
Business Incorporation in New York: Tax Efficiency
Corporate income in New York is taxed at a flat rate (generally 6.5%). In contrast, individual income tax can reach 10.9%.
Forming an S Corporation or LLC may allow pass-through taxation, which can lower your tax liability.
Business Incorporation in New York: Access to Capital
Corporations can issue stock, attract angel investors, and qualify for commercial loans more easily than sole proprietors or partnerships.
A formal legal entity provides transparency and investor confidence.
Business Incorporation in New York: Liability Shield
Corporations and LLCs separate personal assets from business debts.
If the business is sued or goes bankrupt, the owners' personal assets are generally protected.
Business Incorporation in New York: Governance and Continuity
Corporations must establish a board of directors and adopt bylaws, promoting structured decision-making and long-term stability even when ownership changes.
3. Business Incorporation in New York: Steps to Form Your Company
Here’s how to incorporate your business under New York law.
Business Incorporation in New York: Name Reservation
Search for available names using the New York Department of State website.
The name must be unique and include a designator like “Inc.” or “Corp.”
Business Incorporation in New York: File Formation Documents
To incorporate:
Corporations must file a Certificate of Incorporation
LLCs file Articles of Organization
These must include:
Business name
County location
Number of shares (for corporations)
Registered agent or service of process
Fee: $125 for corporations, $200 for LLCs
Business Incorporation in New York: Appoint a Registered Agent
You must list an agent who can receive legal notices.
New York allows the Secretary of State to serve this role by default.
Business Incorporation in New York: Create Bylaws or Operating Agreement
These internal governance documents are not filed with the state but are critical for resolving disputes and managing business operations.
Business Incorporation in New York: LLC Publication Requirement
LLCs must publish a notice of formation in two local newspapers for six weeks and submit a Certificate of Publication with a $50 fee.
This requirement does not apply to corporations.
Business Incorporation in New York: Obtain EIN and Licenses
Apply for a Federal Employer Identification Number (EIN) via IRS.gov.
Depending on your business type, you may also need:
Sales tax permit
Professional licenses
Zoning permits
4. Business Incorporation in New York: Required Documents
When incorporating, prepare the following:
Certificate of Incorporation or Articles of Organization
Legal ID (e.g., driver’s license of incorporator)
Registered Agent Consent Form (if applicable)
Initial bylaws or operating agreement
Publication affidavits (for LLCs)
IRS EIN confirmation
Ensure these are complete and signed correctly to avoid rejection or processing delays.
5. Business Incorporation in New York: Fees and Expenses
| Category | Typical Cost Range |
|---|---|
| State Filing Fee | $125 (corp) / $200 (LLC) |
| Publication (LLC only) | $500–$1,500 |
| Registered Agent (optional) | $100–$300 annually |
| Legal Drafting (attorney) | $500–$2,000+ |
| EIN and Licensing | Free (most applications) |
Note: Corporations must also file biennial statements with a $9 fee every two years.
6. Business Incorporation in New York: Why Hire an Attorney?
Mistakes during incorporation can lead to tax penalties or legal exposure.
Business attorneys:
Advise on optimal entity structure
Draft enforceable internal documents
Review contracts and tax responsibilities
Ensure compliance with state and federal law
Assist with post-incorporation tasks (permits, licenses)
At SJKP LLP, we guide entrepreneurs and established businesses through all phases of incorporation, governance, and growth.
The information provided in this article is for general informational purposes only and does not constitute legal advice. Reading or relying on the contents of this article does not create an attorney-client relationship with our firm. For advice regarding your specific situation, please consult a qualified attorney licensed in your jurisdiction.
