The key to making the most of New York corporation law and partnership law is the decision to incorporate your business. A corporation affects your ability to gain capital, controls the amount of debt you assume and determines your tax obligations. However, these advantages must be balanced against the additional taxes your business will incur.

New York partnership law makes a partnership subject only to personal income tax, unlike a corporation. On the other hand, business partners may be held responsible for business debts.

There are several options for forming a company under New York corporate law. These include:

1. New York incorporation as a profit or non-profit corporation. An S corporation (S-corp) is taxed under Subchapter S of the Internal Revenue Code which generally does not include income taxes.

2. A New York limited partnership. This type of partnership has limited partners in addition to general partners.

3. A New York limited partnership. This type of partnership has limited partners in addition to general partners.

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Determine the best of corporation when incorporating a business in New York

The most important factors to consider are the personal liability obligations and tax implications. You should also familiarize yourself with the operating requirements and reporting regulations.

I recommend: Limited Liability Partnership provides instructions for starting each type of business organization and also has other business documents. The Company Corporation specializes in starting businesses and offers resources dedicated to small businesses.

Find corporation law firms in New York

Incorporating in New York must comply with the disclosure, operating and reporting requirements. New York corporation law specifies these requirements in detail.

I recommend: Abrams, Fensterman, Fensterman, Eisman, Greenberg, Formato & Einiger in Lake Success has expertise in corporate law for businesses of all sizes. Aronauer, Re & Yudell in New York has a number of practice areas including corporate law.

Use an incorporation service in New York

You must file the registration forms and pay the associated fees as required by New York corporation law in order to form an NY corporation or NY partnership. You may also need to file Articles of Incorporation, depending on the type of corporation you decide to register.

I recommend: Amerilawyer.com allows you to incorporate your business online or over the phone. Blumberg’s Law Products offers a range of resources for creating a business in New York in addition to other business services.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  New York state business corporation law requires annual fees and filings to maintain your corporation. Corporations are automatically C-corps unless they specifically register as S-corps with the primary difference being the way they are taxed. One person may frequently hold more than one position in these corporations and many if not all shareholders are also directors in a small corporation.

To form a corporation in New York, you must understand the basics of New York corporation law. The structure of your New York corporation will be instrumental in the success of your business. It will affect your tax treatment, filing requirements, funding potential and liability obligations.

The ownership plans for your business will help determine how to incorporate in New York. A traditional corporation is useful to raise money with investors, or to allow ownership by employees in the form of shares. However, New York corporate law requires complex, ongoing paperwork and will tax your business income on the corporate and shareholder levels.

New York LLC registration, on the other hand, is less complicated. Taxation occurs only on one level, which may be an important benefit to your company. The structure is more simple and can require only two people to incorporate.

The options available under New York corporate law are:

1. A domestic corporation, incorporated as either a C-corp or an S-corp.

2. A limited liability company (LLC).

3. A limited liability partnership (LLP).

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Choose what works when considering New York incorporation

The decision on whether to form a corporation or partnership depends on your long-term goals. Ownership is easier to divide in a corporation, while partnerships under New York partnership law are not well suited for growth or sale and do not offer stocks. Taxation is different for both types of entities. And, finally, New York corporation registration requires filing of paperwork and fees for each. Corporation law firms in New York can be an additional useful resource to help in your decision.

I recommend: FindLaw will guide you through picking the structure that works for you. If you need further advice about incorporation in New York, find corporation law firms in New York at Martindale-Hubbell.

Make your New York corporation a reality

New York corporation and partnership law requires filing certain forms as well as submitting fees. The filing may include articles of incorporation or, for New York LLC registration, articles of organization. Fees will vary depending on the structure. Although New York business corporation law allows the forms to be downloaded electronically, you must file in person, by mail or by fax.

I recommend: Conduct a records search through the New York Department of State's search engine to find a business name that has not been incorporated. Find the correct forms for a corporation at the Division of Corporations' Business Corporation Filing page. Confirm the fee required by checking the Division of Corporations' fee schedule. A complete step-by-step guide to forming a business in New York can be found at the Department of State website.

Follow New York business corporation law closely

New York corporation law requires specific information to be included in filings. The New York Business Corporation Act also details requirements regarding shareholders, naming conventions and ongoing administrative requirements under New York corporate law.

I recommend: Review the laws related to New York incorporation, including New York partnership law, at onecle. Visit the Department of Taxation and Finance to learn about your tax obligations as a New York corporation. If in doubt, incorporate using a reputable online service such as Active Filings LLC.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Don't forget to register for an employer identification number with the IRS if you plan on having employees.
• •  Once you have filed for incorporation, you will have ongoing filing requirements annually to keep your company in good standing.

Making a new corporation is one of the most common reasons for using New York corporation and partnership law. A small business may prefer to file the documentation needed to incorporate a business directly with the state. There are also many companies that provide business formation services for a fee.

The most important factor in incorporating in New York is choosing a specific business structure. New York partnership law makes some important distinctions between a corporation and a partnership. A partnership generally does not pay a business tax although the partners are liable for business debts.

Corporate law defines the way in which the following entities interact:

1. Shareholders that provide funding when incorporating a business in New York. Shareholders may hold special privileges such electing a board of directors, proposing resolutions and sharing in the company’s income.

2. Directors that oversee the company’s activities. The activities of the board of directors are typically determined by the company’s bylaws. The board of directors and the shareholders are typically the same group of people in a small business.

3. Employees that provide expertise and perform labor for the company. Employees are also shareholders in many cases.

Action Steps
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Select the best structure for your business according to New York corporation law

Your choice of business types can include corporations, full partnerships and limited partnerships. There are many sites that summarize business laws in New York and you may also need corporation law firms in New York to explain these laws to you.

I recommend: MyNewCompany.com outlines the differences in the various types of businesses in New York. Start-a-Business.com is based in Tappan and provides a comparison between a corporation and limited liability company.

Use a company to create a business under New York business corporation law

An incorporation service in New York can submit the required forms on your behalf in exchange for a fee. However, you will still need to comply with the disclosure, operating and reporting requirements.

I recommend: Inc-It-Now.com has an incorporation order form specifically designed for creating New York businesses. Incorporation Nation provides incorporation services in New York and also offers resources for doing business in New York.

Create a new business by yourself under New York state business corporation law

Each state has a department that is responsible for the formation of new businesses. You can complete these forms yourself and submit them directly to the correct government department.

I recommend: The Department of Corporations maintains the filing information for all business structures in New York. free2incorporate.com offers free e-books for incorporating yourself by state.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  You will need to select a name before you form a corporation in New York. Many online services provide a name search function to determine if a particular name has been used before. The required forms will also provide spaces for more than one business name in many cases. This increases the chances that an unused name can be found.

Like other states, New York regulates organizations doing business within its borders. There are laws New York corporations must follow at each stage of their development, from formation to management and even to dissolution. While you will no doubt seek professional legal advice to start a New York corporation or before signing a partnership agreement in New York, knowing some key facts and terms related to corporate law certainly cannot hurt.

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Limited partnerships

Limited partnerships exist when an individual owner of a company seeks funding from one or more other investors, known as 'limited partners' because they play a less active role in the actual running of the company.

I recommend: Find Law discusses the pros and cons of limited partnerships for small businesses in New York and other states.

Business corporation

A business corporation is created by corporate law and is a separate entity from the partners that formed it.

I recommend: New York State explains what papers you must file in order to form a business corporation.

Non profit corporations

Non profit corporations are created by individuals who believe their collective efforts can benefit the public good. These organizations are allowed to realize profits but those profits must be channeled back into the corporation to sustain it and advance the cause it is dedicated to.

I recommend: State Lawyers goes into much detail about how to form non profit corporations in New York, claim tax exempt status, protect yourself from personal liability and even dissolve the corporation.

Partnership agreements

Newly formed corporations in New York operate according to partnership agreements that specify each partners' role and responsibilities in addition to identifying each partners' individual investment.

I recommend: The Citizen Media Law Project explains how partnership agreements can help you avoid a situation where courts might have to step in and decide issues between partners.

License requirements

New York state has license requirements for businesses that were formed in the state or are conducting business in the state.

I recommend: American Incorporators explains the standard license requirements for business corporations and also any special requirements you may need to file, such as whether it is necessary to file a notice of public formation.

Nonprofit Coordinating Committee of New York

The Nonprofit Coordinating Committee of New York was formed to provide business support for nonprofit organizations.

I recommend: If you're unsure exactly how to set up a nonprofit organization in New York, access the Nonprofit Coordinating Committee of New York's website and scroll down to "The Checklist" which identifies the steps you must take to establish the office associated with a nonprofit company.