This list does not cover every issue for starting every kind of business but it highlights the main considerations for forming a business in New York. If you are in doubt, call us and have a New York business formation lawyer specifically assist you. You may also consult checklists created by NYC Business Express for specific types of businesses here.
- Make sure this is what you really want to do.
- Consult a few business lawyers and a few accountants.
- Prepare a business plan. Make sure that your business plan anticipates things that may be essential to operating a successful business for you, like whether you may want a liquor license, for example. It has been our experience that deciding ‘after the fact’ to get something like a liquor license or some other essential license for your business can create an unnecessarily stressful experience for you, your business partners, and the person hired to handle the liquor license. Think ahead and prepare a thorough, thoughtful business plan. It is essential!
- Identify potential financing for your business and evaluate the type of financing that might be best for the business. You should discuss this with any potential partners, a lawyer, and an accountant.
- If you have potential business partners, have a serious and frank conversation about your long-term visions for the business, your roles, and, as specifically as possible, how you each plan to execute those roles, your exit strategies, your ideas about how money should be spent or invested, and other similar very important topics related to actually operating a business.
Once You Are Committed
- Consult your business plan and complete it as necessary.
- Determine the appropriate type of business entity for your business and have it formed.
- Think about protecting your business’s intellectual property such as your business name, tagline, creations or inventions by obtaining trademark, copyright, or patent protection. You should consult an attorney.
- Obtain an Employer Identification Number (EIN) (this is also known as a federal tax identification number, and it identifies a business entity. Generally, all businesses need a federal tax identification number. An EIN is a nine-digit number that the Internal Revenue Service assigns to a business). If you hire someone to form your entity, they usually will obtain this for you, but you can also apply on your own here.
- Open a bank account. You will need the formation documents for the entity and some banks may even require executed partnership agreements.
- Execute a partnership/operating/shareholders’ agreement (this sets out the rights and obligations of the owners with respect to each other and the business and it is very important).
- Identify a business location.
- Review and execute a commercial lease (you should consult a lawyer).
- Lease or purchase necessary equipment.
- Begin implementing your marketing plan (this is a part of your business plan).
- Confirm and ensure that you have met or do meet your licensing obligations (if any) and obtain necessary licenses (you should consider consulting with an attorney): Go to the New York License Center website for assistance, and note that you may have city and state licensing obligations, so you should double-check the following places as well: NYC Department of Consumer Affairs, New York City Department of Health, New York State Department of State, New York State Department of Education (if you are providing instruction of any type), and New York State Department of Financial Services. Unless you are a prospective professional licensee or you live outside the five boroughs, you will most likely identify your licensing obligations at one of these sites.
- Determine whether you need liability insurance for your kind of business.
- Review New York State Tax Guide For New Businesses.
- Find and hire an accountant if you do not already have one. If finances are low, consider finding someone reputable who is willing to teach you how to use a program like QuickBooks to manage company finances yourself and then have you provide the information to them to prepare essential financial reports and business tax returns. This is a great way to ensure that you are aware of your company’s numbers and to save on professional fees. Many accountants offer this service.
- Hire employees – Visit these websites: Starting a business in New York State and New York State Department of Taxation and Finance on Hiring Employees. If you have employees in New York, you must carry workers’ compensation and disability insurance.
- Have necessary business contracts prepared.
- Always ensure that you pay all New York State Department of State assessments for the maintenance of your entity and ensure that your address remains up to date and current with the Department of State as well.
- In the event that you decide to sell or transfer an interest in your entity or you decide to dissolve the entity, you should consult with a business attorney before doing anything on your own. This can be relatively straightforward or it can be quite complex. Confirm the appropriate steps for your business with an attorney first.
- Contact Hendricks Law Firm PLLC with questions or for assistance with preparing any important business contracts or maintaining your entity. We offer flat fee packages to form your business entity and prepare essential records and owners’ agreements, or to set up your retail business or restaurant. Contact us to find out more information.