Registrations and Filings for Starting Your Own Business
Each state has its own individualized requirements, from registration to filing fees, that must be satisfied before starting a business. Many states have websites set up to provide information to help entrepreneurs understand their requirements and responsibilities: Arizona, California, Delaware, Florida, Georgia, Hawaii, Maryland, Massachusettes, Nevada, New Jersey, Pennsylvania, Texas, Washington.
Some businesses require specific New York State permits. Examples of businesses that require permits include auto repair shops, beauty salons, food establishments, real estate brokers and day care centers. For more information on whether a business needs a permit or what are the permit requirements, contact:
Governor's Office of Regulatory Reform
State permits may not be the only permits required. One must inquire whether there are any local laws that apply to one's business. Contact the village, town or city clerk and county clerk where the business will be located. Examples of local permits may include zoning, parking, sign regulations and certain occupational licenses such as auctioneers, electricians and plumbers. It is advisable to contact the local government first.
There are 3 common forms of business organizations. They are: the sole proprietorship, the partnership and the corporation. For more information on the variety of business organizations, contact the Empire State Development at (800) 782-8369 and/or buy their book Your Business ($5.00). An attorney, accountant or other qualified professional should be consulted before deciding on a particular business structure.
If you plan to do business under a name other than your own, the name must be registered. (Keep in mind that registration is not permission to conduct business.) Sole proprietorship and general partnerships are registered with the county clerk where the business is conducted. Limited partnerships and corporations are registered with the New York State Department of State. Standard registration forms are available in any legal supply store. The following is a brief outline of the most common forms of business structure:
Sole Proprietorship: This is the simplest business structure. It may be appropriate for the start up of a one person business. It is more flexible than the partnership or the corporation, however all business responsibility falls on the single owner. This includes unlimited financial liability incurred by the business.
Filing a Business name:
Fee: $25.00 plus $4 to $5.00 for each certified copy. Three copies are usually needed: one for the business, one for the bank and one for the county clerk. The filing fee in the five counties comprising New York City is $100.00 and certified copies are $10.00. Fees should be verified prior to finalizing business plans.
Self-Employment Tax: This tax is similar to the Social Security tax withheld from wage earners. Self-employment tax is based on net earnings of $400.00 or more. Currently, the self-employment tax rate is 15.30%. This rate is separated into the Social Security portion (12.40%) and the Medicare portion (2.90%). The maximum net earnings subject to Social Security is $62,700.00. There is no maximum limit to the amount subject to Medicare. All net earnings for self-employment are subject to the Medicare part of the tax.
Estimated Tax: If the total of the estimated income tax and self employment tax for the year exceeds total withholding and credits by $500.00 or more, you may be required to make both State and federal estimated tax payments. On federal and State personal income tax returns, income from the business is considered business income rather than wage or salary.
Partnership: This is a relationship between two or more persons or companies that carry on a trade or business together. In the absence of a partnership agreement, the New York State Partnership Law sets forth the rights and duties of the partners.
Form: Certificate of Conducting Business as Partners
This certificate must be filed. It can be obtained from a legal supply store. After completing the form, it must be notarized; the original must be filed with the county clerk of each county where the business is conducted.
Fee: $25.00 plus $4 to $5.00 for each certified copy. Three copies are usually needed: one for the business, one for the bank and one for the county clerk. The filing fee in the five counties comprising New York City is $100.00 and certified copies are $10.00. Verify fees prior to finalizing business plans.
Limited Partnership: A limited partnership certificate is required to be filed with the New York State Department of State. Immediately after the filing of the certificate, a notice must be published in two newspapers in the county where the business is located each week for six successive weeks specifying the details of the limited partnership. The filing fee for a limited partnership is $200.00. Fee must be verified prior to finalizing business plans.
Self-Employment Tax and Estimated Tax - See information under Sole Proprietorship
Partnerships are required to file both State and federal partnership returns. In addition, partners should include their share of the partnership income on their State and federal personal income tax returns. Income from a partnership is considered business income rather than wages or salaries.
Corporation: A New York State Corporation is an entity separate and distinct from the individual(s) who own and manage the business. A corporation is authorized to sell, buy and inherit property in its own name and is legally endowed with rights, powers and duties in the conduct of lawful activities. Business corporations are operated for profit and are authorized to raise capital by selling shares of interest in the corporation. A corporation's debts and obligations are distinctly its own.
Forming a Corporation: New York State does not require an attorney to prepare corporate documents, but you may want to seek the assistance of a professional when forming a corporation.
Filing forms may be purchased at a legal supply store.
Filing Fee: $5.00 for each name search, $20.00 to reserve a name, and $125.00 for a certificate of incorporation. File with:
New York State Department of State
Corporate Franchise Tax: Corporations must file a franchise tax report and pay a franchise tax for all or part of each calendar/fiscal year the corporation exists. Corporations are required to file federal tax returns.
S Corporations: Under Section 1362 of the Internal Revenue Code, certain small business corporations may report income on personal tax returns. Individual shareholders who wish to obtain this option must file federal form 2553. Once approval is granted by the Internal Revenue Service, a similar election form called CT-6 must be filed with the New York State Department of Taxation and Finance.
Not-for-profit Corporations: The assets, income and profit of the corporation shall not be distributed to the benefit of the members, directors, or officers except to the extent permitted by statute. The filing fee with the Department of State is $75.00. Approval from the Internal Revenue Service must be obtained before requesting approval from the New York State Department of Taxation and Finance.
Foreign Corporations: An out-of-state corporation must be authorized to do business in New York State by the New York State Department of State.
Last Updated: April 25, 2001