Corporation & Business Setup

Our experts are ready to help you with starting your corporation,

Types of businesses that operate in New York State are:

  • Business Corporation
  • Not-for-Profit Corporation
  • Limited Liability Company
  • General Partnership
  • Limited Partnership
  • Sole Proprietorship

Business Corporation

A business corporation is a legal entity separate and distinct from the individual(s) who compose the business. It has rights and abilities similar to those of a natural person. Principal features are perpetual duration, limited liability and easy transferability of interests. A corporation may be formed for any lawful business purpose or purposes. The Department of State cannot offer advice about the choice of business formation and strongly recommends consulting with legal and financial advisors before making the decision.

A business corporation may be formed by filing a Certificate of Incorporation pursuant to Section 402 of the Business Corporation Law, our office is prepared to help you every step to make this process as easy and simple as possible, letting you get back to business!

  • A Certificate of Incorporation must be filed (signed by at least one incorporator) with the Department of State.
  • Personal liability is limited, for shareholders.
  • The life-span of the business is perpetual; or for a designated period stipulated in the Certificate of Incorporation
  • For purposes of taxation* a corporation pays state franchise taxes and taxes on income; shareholders pay taxes on income distributed as dividends (a limited exception exists for “Subchapter S” corporations).

Not-for-Profit Corporation

A not-for-profit corporation is a corporation formed pursuant to the Not-for-Profit Corporation Law. Not-for-Profit Corporation Law Section 201 (Purposes) provides a list of general purposes for which a not-for-profit corporation may be formed. The Certificate of Incorporation of a not-for-profit corporation must set forth the specific purposes for which the corporation is being formed. A not-for-profit corporation may not be formed for pecuniary profit or financial gain and the corporation’s assets, income or profit may not be distributed to or otherwise used to benefit the corporation’s members, directors or officers except as permitted by the Not-for-Profit Corporation Law, e.g., as reasonable compensation for services to the corporation. (See Sections 102 (a)(5) and 515).

  • A Certificate of Incorporation must be filed (signed by at least one incorporator) with the Department of State.
  • Personal liability is limited, for members.
  • The life-span of the business is perpetual; or for a designated period stipulated in the Certificate of Incorporation.
  • For purposes of taxation* a not-for-profit corporation is not automatically exempt from federal and state taxes. To qualify for tax exemption status under the Internal Revenue Code, contact the Internal Revenue Service. For state tax exemption, contact the NYS Department of Taxation and Finance.

Limited Liability Company

A limited liability company (LLC) is an unincorporated business organization of one or more persons who have limited liability for the contractual obligations and other liabilities of the business. The LLC is a hybrid form that combines corporation-style limited liability with partnership-style flexibility. The owners of an LLC are “members” rather than shareholders or partners. A member may be an individual, a corporation, a partnership, another limited liability company, or any other legal entity. An LLC may organize for any lawful business purpose or purposes. The Department of State cannot offer advice about the choice of business formation and strongly recommends consulting with legal and financial advisors before making the choice.

  • Articles of Organization (signed by one or more organizers) and a Certificate of Publication must be filed with the Department of State.
  • Personal liability is limited, for members.
  • The life-span of the business may be for a designated period stipulated in the Articles of Organization; OR until a dissolution event occurs and the company takes no action to continue.
  • For purposes of taxation* an LLC can elect its classification for federal tax purposes. An LLC with two or more members can elect to be an association (corporation) or a partnership; an LLC with one member can elect to be an association (corporation) or elect to be disregarded as an entity separate from its owners (in effect, to be treated as a sole proprietorship for federal tax purposes.)

General Partnership

  • A Certificate of Assumed Name (following an agreement of the partners) with the clerk of the county/ies in which the business is conducted.
  • Personal liability is joint and individual for the general partners who are responsible for the obligations of the partnership.
  • The life-span of the business is for a designated period stipulated in the partnership agreement; or until a dissolution event occurs.
  • For purposes of taxation* a general partnership is not treated as a separate taxable entity; business income is taxed through each general partner’s personal tax return.

Limited Partnership

a partner in a company or venture who receives limited profits from the business and whose liability toward its debts is legally limited to the extent of his or her investment.

  • A Certificate of Limited Partnership (following an agreement of the partners) and a Certificate of Publication must be filed with the Department of State.
  • The life-span of the business is for a designated period stipulated in the Certificate of Limited Partnership; or until a dissolution event occurs, subject to any right to continue that may be stated in the partnership agreement.
  • Personal liability is joint and individual for the general partner(s) who are responsible for the obligations of the partnership; limited partner(s) are liable to the extent of their capital contributions to the partnership.
  • For taxation purposes* a limited partnership is not treated as a separate taxable entity; business income is taxed through each partner’s personal tax return.

Sole Proprietorship

  • An Assumed Name Certificate must be filed with the clerk of the county/ies in which the business is conductedONLY IF you are operating under a name other than the proprietor’s (no formation document is required).
  • Personal liability is full- a sole proprietor is personally responsible for all debts of his or her business.
  • The life-span of the business is determined by the individual (proprietorships automatically cease on the retirement or death of the sole proprietor).
  • For purposes of taxation* business income is reported and taxed through the sole proprietor’s personal tax return.