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This comprehensive guide to starting a business in New York will take you through each step, from turning your idea into a full-fledged business plan to making your business official with the state government.

Starting a business in New York in 12 steps

1. Develop an idea

Every successful business starts with a good idea. Ask yourself these questions:

  • Which product or service can your business provide that doesn’t already exist on the market?
  • How does your business idea refine an existing product or service?

Determine your personal strengths and interests: Developing an idea that suits your personality and positive traits will provide motivation to put in the long hours necessary to address the myriad challenges you’ll face in getting your business off the ground.

Figure out how to market your expertise: If your business idea is not something you totally believe in and can sell effectively, it will be much harder to succeed.

2. Do the research

Once you have an idea, it’s time to put it through the wringer and decide if it’s viable in the market. Conduct market research to arrive at answers to these key questions:

  • Is there a demand for your product/service in New York?
  • Who is your target market?
  • Do existing businesses in New York offer a similar product/service?
  • What makes your business unique compared to the competition?

Be patient: Coming up with satisfactory answers may require refinement, or even a total overhaul, of your original idea. You’ll only want to proceed with the next steps after determining that a niche exists in the New York market for your business idea.

3. Draft a business plan

Now it’s time to write the blueprint of your business. A great business plan should chart the path of your company from infancy to success while being able to attract investors to provide financing.

Your business plan ought to include the following sections:

  • Executive summary – An overview of your business and why it will be successful
  • Description of business – Explain the advantages of your business and the problems it solves
  • Market research – Provide research on your industry, target market, and potential competitors
  • Organization and staff – Detail the nuts and bolts of your business; how it’s structured and who will run it
  • Product or service description – State what you are selling or offering
  • Marketing plan – Explain your strategy for attracting customers
  • Fundraising – The money you’ll need in the next five years to grow your business and how you’ll spend it
  • Financial forecast – Data and balance sheets providing a financial forecast for your business
  • Appendix – An optional section with supporting and/or requested documents like resumes, letters of reference, permits, etc.

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4. Secure funding

Every business needs money to get off the ground. In fact 82% of businesses that fail do so because of a lack of cash flow, U.S. Bank found in a recent study. Your business plan should include a detailed estimate of the funds you’ll need to cover expenses for at least a year, so now it’s time to acquire the money.

If you aren’t wealthy enough to self-fund your business, you can choose from a number of other funding options. These include a loan from the U.S. Small Business Administration, taking out a loan from a commercial bank, launching an equity crowdfunding campaign, or securing funding from an angel investor or venture capitalist group active in New York.

An angel investor is a wealthy individual who invests their personal finances in a startup, typically in the beginning stages, whereas a VC is a group of investors that will fund a business throughout its existence.

Which route you choose depends on the specifics of your business: angel investors typically invest smaller sums to help get a startup off the ground, while VCs invest larger sums of money in exchange for a greater say in the operations of a business. Smaller startups usually opt to pursue funding from angel investors. Plenty of both types of investors are operating in New York.

New York Angel Investors and VCs

  • New York Angels – An organization with over 130 members that is one of the world’s top ten most active angel groups. To date, the group has invested over $100 million in 245+ companies.
  • Empire Angels – An angel network with bases in New York City and London that has invested $7.5 million in over 20 companies in its 7 years of existence.
  • ARC Angel Fund – A member-led angel fund with a focus on NYC and Mid-Atlantic area startups in tech-related fields. Investments average between $50K to $250K.
  • Great Oaks Venture Capital – A highly active seed investor based in New York City with a team boasting decades of investment experience.

Additional Investor Resources

5. Decide on a legal business entity

The form of business entity you choose will affect many factors. There are three main structures to choose from:

  • Sole proprietorship – The name for running a business by yourself. Legally, you and your business are one and the same, with no separate legal entity for your business.
  • Partnership – It is legally identical to a sole proprietorship, except that it comprises two or more people.
  • Corporation – A complex legal structure that is a separate entity (providing legal protection to owners) from the owner and comprises directors, officers, and shareholders.
  • LLC – AKA “Limited Liability Company”, this is a hybrid entity between a sole proprietorship and a corporation that possesses advantages of both. An LLC provides the liability protection of a corporation, yet isn’t subject to double taxation as the profits go through your personal tax return.

LLCs are the option of choice for small business owners as they are easy to manage and provide the benefits of a corporation while lacking their complex structure. Taxwise, they operate more like a sole proprietorship.

You may want to consult with an attorney to help decide which entity works best for your business.

6. Register your business

After deciding on the entity your business will take, it’s time to make your business official with the state of New York. The steps of this process vary depending on whether you are forming a sole proprietorship, an LLC, or a corporation.

For sole proprietorships

Operating a sole proprietorship in New York does not require you to make any special filings with the state. However, if you decide to use a business name different from your legal name, you must file a certificate of fictitious business name.

First, perform a search with the New York Corporation and Business Entity Database to make sure that the name you want to use is available. If the name is free, you can go ahead and file a certificate of fictitious business name application with the county clerk’s office in the county where your business is located. Click here for a directory of the state’s county clerks.

Out of name ideas? Check out our free business name generator

For LLCs and corporations

Creating one of these two entities in New York follows similar steps, with a difference in the legal document that you file with the state government.

First, you must designate a registered agent to handle process notices and other government correspondence on the business’s behalf. Anyone with a physical address in New York can be a registered agent, meaning that you can appoint yourself, however, hiring a professional is affordable ($50-$200 a year) and recommended.

Next, run a search to verify that your chosen business name is available for use in the state. Then, you can file the legal document to create your business in the state. Those forming a corporation can skip past the final steps of forming an LLC.


An LLC is formed in New York upon the filing of Articles of Organization. These can be filed online, or through the mail. In most states, filing the articles completes the process, however, forming an LLC necessitates two more steps in New York.

Within 90 days of filing Articles of Organization, your LLC must adopt a written operating agreement that makes clear the roles and obligations of the LLC’s members. However, you are not required to file the operating agreement with the state government.

Last, your LLC must publish a copy of your Articles of Organization, or a notice covering the formation of your LLC, in two area newspapers. Next, retrieve a Certificate of Publication from the publishers of the newspapers, attach affidavits of publication from both newspapers and submit it to the New York Department of State, Division of Corporations.


A corporation is created in New York through the filing of a Certificate of Incorporation. This can be done online or through the mail and the fee is $125 plus a tax that varies depending on the number of authorized shares your corporation plans to issue.

Our picks for registered agent services

Northwest Registered Agent

Northwest can help. You’ll need to file official documents to establish your business. The process is a little different in each state, but Northwest has offices all over the U.S. and helps business owners with this very thing every day. Northwest also offers registered agent services, annual report filings, and some free legal documents that pertain to starting a business.


ZenBusiness aims to help business owners start, run, and grow their businesses. When you’re getting started, take advantage of the filing options, like setting up an LLC and business formation plans. Later on, you might want to take advantage of their registered agent services, domain name registration, or annual report filing. Start for $0 + state fees.

Harbor Compliance

Harbor Compliance is a great fit for organizations that register in multiple states and for those who don’t want to pay excessive service fees. With their network and electronic document delivery, they help ensure your business never misses a legal notification.


7. Acquire federal and state tax IDs

Now you should obtain a Federal Employer Identification Number (EIN), which is like a social security number for a business and allows you to open bank accounts, handle payroll, and file taxes.

For sole proprietorships, an EIN is optional, although it is required for corporations and LLC’s. You can apply online for your EIN through the IRS website, or fill out and mail this form. Each state has its own laws and taxes regarding businesses.

Visit the New York Department of Taxation and Finance to learn more about applicable business taxes levied by the state, and create an account for your business to file state taxes.

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8. Open business banking and credit accounts

Opening a bank account for your business is crucial because it allows you to separate company assets from your personal assets, and makes filing taxes a lot easier. This is a recommended step, even if you are operating a sole proprietorship.

We recommend Novo for small business banking. Built for small business owners, entrepreneurs, and freelancers.


It’s also a wise idea to obtain a credit card for your business because it will help you isolate business expenses and build up credit for your company, which may help in securing investment in later stages.

New York banks for small businesses

9. Get the necessary licenses and permits

Depending on the type of business you are opening, you may need to apply for a number of permits and licenses to operate legally. For example, a restaurant will need a liquor license, and a pawn shop will need a reseller’s license. The paperwork may prove a hassle, but it’s a necessary ordeal that will protect you from fines, lawsuits, and other legal hazards.

New York does not issue a general business license, but many professions in the state require special licenses or certifications.

The New York Department of State hosts an excellent portal dedicated to professional licensing, with information on the requirements for obtaining dozens of professional licenses in the state, and instructions on how to apply for them.

10. Choose a location

Whether you are running an online business or opening a restaurant, location is everything. Be aware of the demographics of the neighborhood or town that you are considering: Are the local residents likely to visit your business? Will nearby competitors take a share of your potential profits?

11. Get insured

No matter what type of business you form, buying insurance coverage to protect yourself in the case of property damage or legal action is a good idea. In fact, businesses with employees are required by the federal government to have two types of insurance, while others are strongly encouraged, or required at the state level, depending on your business type. Consult with a licensed insurance agent to find out which types of insurance you should get.

Required forms of insurance:

  • Workers’ compensation: Covers medical costs and disability benefits if an employee is injured or becomes ill on the job.
  • Unemployment insurance: Provides benefits to workers after a loss of job through no personal fault.

Recommended forms of insurance:

  • Professional liability insurance: Covers losses as a result of property damage, medical expenses, libel, slander, and negligence claims.
  • Commercial property insurance: Covers property damage to business-owned properties and possessions as a result of fire, theft, or storm.
  • Disability insurance: Provides short-term benefits for employees suffering an illness or injury. Required in certain states such as California, New York, and Hawaii.

12. Develop an internet presence

Establishing an identity on the web is an important investment in a business’s future development. Here are some key steps in the process:

  • Register a domain name for a company website (You can use Domain.com, Bluehost, GoDaddy.com, Namecheap.com). Design the website and fill it with content.
  • Create profiles on the popular social media services (Twitter, Facebook, Instagram)
  • Register a Google profile for your business
  • Create accounts on review sites such as Yelp, Google Reviews, and TripAdvisor

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New York small business resources

  • New York State: Business Express – Makes registering your business in the state convenient and easy.
  • NY Department of Taxation and Finance – Register to pay a variety of business taxes in the state.
  • New York State: Professional Licensing – Apply for one or more of over 32 occupational licenses issued by the state government.
  • New York Small Business Development Center – A statewide organization dedicated to helping small business owners through a variety of services, including free consulting, training programs, and connection to funding sources.
  • Built in NYC – An online community and resource page for the New York City startup and tech scene.
  • Digital NYC – News, event listings, and more for those involved in the NYC startup community.
  • New York Startup Lab – A team of digital marketers, strategists, and tech specialists focused on boosting the viability of their client companies.
  • AngelPad – A NYC accelerator that has been rated the best of its kind four years running by MIT’s Seed Accelerator Benchmark.
  • Barclays Accelerator – An accelerator offering state-of-the-art technology, mentoring, and working spaces to its clients.
  • Monarq Incubator – An incubator program founded by women exclusively geared towards women-led startups.
  • SCORE NYC – The greater New York City chapter of the nation’s top business mentoring network.

New York small business statistics at-a-glance

  • 2.3 million small businesses are active in New York, accounting for 99.8% of the state’s total businesses.
  • 4.1 million New York residents are employed by small businesses, which is over 48.1% of the state’s workforce.
  • 760,627 New York small businesses are minority-owned.
  • The professional, scientific, and technical services industry was the leading small business employer in the state, followed by retail trade and other services (except public administration).
  • 79.24% of New York startups survive their first year of existence.
  • On average, New York startups create 4.08 jobs in their first year, which is the 6th highest rate in the country.

Sources: U.S. Census: Statistics of U.S. Businesses, Bureau of Labor Statistics, Kauffman Indicators of Entrepreneurship, Small Business Administration