Choices to make before the filing
The basic choice is usually between a limited liability company and a corporation, and the answer depends on how the owners want to be taxed, whether outside investors are expected, and how ownership may change. The state of formation also matters; many small businesses form where they operate, while companies planning to raise venture capital often form in Delaware and then register in the states where they do business. The name must be available and should be checked against existing trademarks, not only the state's database. You will also need a registered agent or an address for service of legal papers. Owners should agree on ownership percentages and decision-making before filing, not after a disagreement.
New York steps people miss
In New York, the Department of State accepts formation documents, but filing is not the end. A newly formed New York LLC must publish notice of its formation in newspapers designated by the county and file proof of publication within a set period, and an LLC that fails to do so can lose its authority to carry on business until it complies. Corporations and LLCs also file periodic statements with the Department of State to keep their information current. A company formed elsewhere that does business in New York generally needs to apply for authority here. Federal rules and New York's LLC law have narrowed beneficial ownership reporting to mainly companies formed outside the United States, but these rules have shifted before and may shift again, so whether a report is needed should be confirmed at filing.
Documents that should come with the filing
The public filing is short, and most of the important terms live in private documents. An LLC needs an operating agreement, which New York requires, covering capital contributions, profit sharing, management, and what happens when a member leaves or dies. A corporation needs bylaws, initial board actions, and stock records. You will also need a federal employer identification number and, depending on the business, state tax registration and local licenses. When we handle an entity filing, we look at the owners' plans, prepare the formation and governing documents together, and set reminders for the filings that keep the entity in good standing.
