Registering a business in New York involves several steps, and looking at the list of things required can appear overwhelming. But, with the right information, it doesn’t have to be.
This guide will help simplify the process of registering your business by walking you through the ins and outs of choosing your business structure and obtaining the required licenses and permits. With this information, you’ll be ready to register your New York business successfully.
Related: Starting A Business In New York Checklist
Step 1: Business Structure
The first step to registering a business in New York is selecting a business structure. A business structure (also called a business entity) refers to how a business is legally set up to operate and defines how it is organized, managed, and taxed. Each business entity has different implications, including personal liability, tax obligations, and overall operational flexibility.
In New York, the four most common types of business entities are sole proprietorship, general partnership, corporation, and Limited Liability Company (LLC).
Related: Comparison of Business Structures
A sole proprietorship is the simplest form of business entity in which one person owns all of the assets and liabilities of the business. This type of entity offers easy setup and minimal paperwork but does not provide any liability protection for its owner.
Related: How to Start a New York Sole Proprietorship
A general partnership is similar to a sole proprietorship except that two or more people own it. Each partner has equal control over the management of the company and shares the profits. However, like a sole proprietorship, each partner is liable for legal issues and debts incurred by the partnership.
A corporation is a separate legal entity from its owners (shareholders), offering limited liability protection. The pros of a corporation include separating the assets of the business and owners, so their personal assets are protected, along with potential tax benefits. However, the cons include a more complex setup, administrative requirements, and higher costs.
Related: How to form a New York Corporation
A Limited Liability Company (LLC) is a hybrid structure that combines the limited liability protection of a corporation with the ease of administration of a sole proprietorship or partnership. Its pros include limited liability for members (owners) and flexibility in management. Its cons involve more administrative requirements and a more expensive setup and annual reporting cost compared to a sole proprietorship or general partnership.
Related: How to form a New York LLC
Step 2: Business Name
After selecting a business structure, the next step for some businesses is registering a business name. This process varies depending on the type of business entity you’ve selected.
For sole proprietors and general partnerships in New York, if you plan to operate under a name different from your own full legal name(s), you’ll need to register an Assumed Name (also known as a Doing Business As, DBA, or Trade Name) with the County Clerk’s Office in the county where your business is located. For example, if Bob Smith wants to open a bagel stand called “Bob’s Bagels” as a sole proprietorship, he would need to file a DBA. This allows him to conduct business and accept payments under the name “Bob’s Bagels” rather than his personal name.
Corporations and Limited Liability Companies (LLCs) can register additional names; this is not a typical practice, as they select the company’s legal name during the formation. Their name must be unique within New York State. To avoid delays in processing the formation, check their availability by doing a New York business name search.
Step 3: Federal Employer Identification Number
The Federal Employer Identification Number (FEIN), also known as a Federal Tax Identification Number, is a unique nine-digit code the Internal Revenue Service (IRS) assigns to identify businesses for tax purposes.
You need an EIN if:
- Your business has employees
- Your business is structured as a corporation, partnership, or multi-member LLC
Sole proprietorships or single-member LLCs without employees can use the owner’s Social Security Number for tax reporting. However, these businesses may still opt for an EIN to avoid using their personal identification number on business documents.
Obtaining an EIN is a straightforward process that can be completed at no cost. The most efficient method is to apply online through the IRS website, which typically takes only a few minutes. Alternatively, you can submit your application by mail or fax using Form SS-4.
Step 4: Professional Licensing
Some occupations in New York require professional licensing before offering services. Some common professions requiring licenses include:
- Cosmetologists and barbers
- Athletic trainers
- Home inspectors
- Accountants
- Architects
- Engineers
- Nurses
- Psychologists
- Teachers
For professions needing licensing, visit the New York Department of State, Division of Licensing Services website.
Step 5: Sales Tax Certificate of Authority
In New York, businesses selling physical goods or providing specific taxable services must obtain a Sales Tax Certificate of Authority from the New York State Department of Taxation and Finance. The certificate allows businesses to collect sales tax from customers and remit it to the state.
Who needs to register:
- Retailers selling tangible personal property
- Service providers offering taxable services
- Wholesalers purchasing goods for resale
- Contractors performing capital improvements
- Businesses hosting events where admission is charged
Registration is required before conducting any taxable business activities in New York.
Step 6: Resale Certificate
A resale certificate allows businesses to purchase inventory or materials without paying sales tax, as these items are intended for resale. When using a resale certificate, the purchasing business agrees to collect and remit sales tax when the item is sold to the end consumer. This process ensures that sales tax is collected only once on the final sale of the product or service.
This document is particularly useful for:
- Retailers purchasing products to sell to customers
- Wholesalers acquiring goods to sell to other businesses
- Manufacturers buying raw materials for products they will sell
- Service providers purchasing materials that will be part of a taxable service
To obtain a resale certificate in New York, businesses must first register for a Sales Tax Certificate of Authority with the New York State Department of Taxation and Finance. Once registered, they can use Form ST-120 Resale Certificate when making qualifying purchases from suppliers.
Step 7: Local Business Licenses
While there isn’t a general state business license in New York, many cities and counties in New York require specific local business licenses. Here are a few examples:
- Food Service Establishments: Restaurants, cafes, and food trucks often need licenses from local health departments to ensure food safety standards. For example, New York City requires a Food Service Establishment Permit from the Department of Health and Mental Hygiene.
- Contractors: Many localities require contractors to obtain licenses. The City of Syracuse, for instance, mandates a General Contractor License from the Division of Code Enforcement.
- Retail Stores: Retail businesses may need special permits. In Albany, retail stores must obtain a Mercantile License from the City Clerk’s office.
- Taxi and Rideshare Services: These services often require local licensing. For example, Rochester requires taxi drivers to obtain a Taxicab Driver’s License from the Rochester Police Department.
Note that licensing requirements can vary significantly between municipalities, so consider checking with your local government offices for specific requirements in your area.
Step 8: Local Building & Zoning Permits
Before finalizing a location for your business, it’s important to understand and comply with local building and zoning regulations. Here’s a brief overview:
Zoning Regulations: Zoning laws determine where specific types of businesses can operate within a municipality. Check with your local planning or zoning department to confirm that your intended business activity is permitted at your chosen location.
Building Permits: If you plan to construct a new building or modify an existing structure, you’ll likely need building permits. These ensure any changes or new construction meets local building codes and safety standards. Building permits are typically obtained from the local building department or code enforcement office.
Certificate of Occupancy: Many municipalities require a certificate of occupancy before a business can begin operations in a building. This document certifies that the structure is safe and complies with all building codes and zoning laws.
Home-Based Business Permits: Some areas have specific permits for home-based businesses. These may regulate aspects such as customer visits, signage, or the percentage of your home used for business purposes. Check with your local zoning or planning department for any home occupation permit requirements. In Buffalo, certain home occupations require a Home Occupation Permit from the Office of Licenses.
Be sure to research these requirements in your planning process to avoid delays or unexpected costs when setting up your business location.
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