There are few things more exciting then starting your own business. Whether you’re turning an existing hobby into something that will make you money, or you have an innovative idea that you think there is a real market for, running your own business is a huge opportunity. Getting it started correctly will help you avoid many problems along the way, which is why the business formation process is so important.
Forming Your Business Correctly
In order to operate business in New York, you need to have it legally set up and registered with the Department of State. There are many different ways that you can have your business configured, and each one will have a variety of different advantages and disadvantages and tax ramifications. Making the right decision now will help make it as easy as possible to find success with your new endeavor. In addition, it can help you keep your tax burden low, and ensure you are able to operate without issues for years to come. Talking to an attorney now will help you form your business with flexibility in mind. It will let you focus on what you do best by letting us worry about your legal and tax frameworks.
Business Formation Options
One of the most important things you’ll have to decide is how you want your business legally defined. This is a starting point of your exciting new future and we can help you ensure that you can grow within this structure and, if/when you outgrow it, we will make sure that it is easy to adjust to fit your new expanded needs. There are several options to choose from:
Sole Proprietorship – This is when there is a single owner, and you are doing business as (DBA) a company name. Any money you make will be taxed as ordinary income, which makes filing your taxes very simple. This is a very affordable option since all you really need to get started is your social security number, and any required permits or licenses to operate in New York.
Partnership – A partnership is quite similar to a sole proprietorship legally speaking, except that there are two or more owners of the the business. A partnership can be set up between two individuals, two or more businesses, or any other combination.
Limited Liability Company (LLC) – This is a special type of corporation that is designed to limit your personal liability, while still making it easy to manage and pay your taxes. LLCs are often used for smaller companies since they have many of the advantages of both a sole proprietorship and a corporation.
Corporation – Incorporating your business is often thought of as only for large enterprise, but it can be a great option for anyone. There are corporate formalities that must be maintained and observed during the life span of a corporation, which can be burdensome and confusing but and we can help with that. Corporations can be taxed as separate entities (the so-called c-corporations) or, if they qualify, can make a valid election to be taxed to not pay any income taxes and have its income or losses divided among and passed through to its shareholders. The shareholders must then report the income or loss on their own individual income tax returns.
Setting up the right structure for you today is as important as how your Business will likely operate for many years. You can, however, adjust your structure whenever it becomes necessary. We will work with you to make sure that flexibility is ingrained into your structure from day one. If you need help with your business formation, changes, maintenance or an analysis as to the most effective and flexible way to run your enterprise, please contact us at 212-596-7039.
Our policy is to communicate clearly, concisely, and on a timely basis. To be responsive to clients. If we can’t take your call immediately, you can expect that a telephone message left in the morning.