Startups have been popping up at unprecedented speeds all across the United States, especially in the tech sector. New Yorkers are at the heart of the action, with everyone looking to the Big Apple for the next big thing.  New York companies have attracted over $7.5 billion in seed financing through late-stage venture funding last year. Startups in the fintech, e-commerce, gaming, and telemedicine market saw a rapid growth in demand which further fortified the rate at which startups were expanding.

As shifts in business and consumer behavior accelerated over the past two years, New York stands out among the other states as one of the more diversified startup ecosystems. With the state’s large consumer, real estate, fintech, digital media, enterprise software, health, and biotech presence, it would appear that most businesses have the opportunity to scale up in the Big Apple.

Starting a New Business in New York

When looking to form a new business, many entrepreneurs opt for LLCs in New York as a preferred business structure, and this is primarily due to the fact that it allows for the flexibility that one would receive from a sole proprietorship or partnership while still receiving the legal protection that is similar to what a corporation would receive. Forming an LLC in The Big Apple is relatively easy and can be broken down into six steps:

  1. Choose an LLC Name: The naming process is one of the most instrumental steps when it comes to forming an LLC, or any business for that matter. The name of the business acts as the foundation of the brand's image and can therefore make or break a company. When deciding on a business name, it is important that entrepreneurs follow the naming regulations that have been set out by local, state, and federal authorities.
  2. Designate a Registered Agent: Businesses that do not have a designated registered agent run the risk of losing their good standing with the state and are at risk of being dissolved since this is a federal requirement for all LLCs. This individual, business entity, or registered agent service will receive all government correspondence on behalf of the LLC. They then forward those documents to members. They will also receive any service of process should the business be implicated in a lawsuit.
  3. File Formation Documents with the State: Once a registered agent has been assigned and a business name has been decided on, entrepreneurs can now proceed to file for formal registration with the state of New York. This is done by filing articles of organization online or via mail with the New York Secretary of State. The state charges a $200 fee to form an LLC.
  4. Creating an Operating Agreement: Even though the state of New York does not require entrepreneurs to officially file an Operating Agreement, entrepreneurs are advised to have one since it may be required when opening a business account. The operating agreement will outline how the business will be run and will ensure that all members of the business are on the same page.
  5. Fulfill Taxation Requirements: The vast majority of New York LLCs will require a federal tax ID number or Employee Identification Number. An EIN is essentially the business’s version of a social security number. This nine-digit number is assigned and used by the IRS to identify the company for tax purposes. This number is a requirement when hiring employees and, at times, when opening up a business bank account.
  6. Obtain the Necessary Business Licenses and Permits: While the Big Apple does not have a statewide general business license that LLCs will require,  New York does uphold the licensure that is required by the United States government for certain occupations such as agriculture and aviation.

Final Thoughts

Starting a new business is an exciting and empowering journey for any entrepreneur. With New York being a business hub for new business ventures, entrepreneurs will be able to draw from the state’s highly diverse talent pool to help grow and enrich their businesses. While the markets are competitive, entrepreneurs should continue to put in hard work, and they will reap the rewards that New York allows for.