Business & Corporate Law: Frequently Asked Questions

LLCs offer the best combination of liability protection and tax flexibility for most small businesses. S-Corps can reduce self-employment tax once profits exceed roughly $40,000-$50,000. C-Corps are typically reserved for businesses seeking venture capital or planning to go public.

Source: N.Y. LLC Law; N.Y. Bus. Corp. Law; IRC §§ 1361-1379

$200 filing fee to the Department of State, plus the mandatory publication requirement that costs $300 to $1,500+ depending on the county. Total formation costs typically run $500 to $2,000 including publication. Failure to publish within 120 days can result in suspension of your LLC's authority.

Source: N.Y. LLC Law § 206; N.Y. LLC Law § 1301

Within 120 days of formation, you must publish a notice of LLC formation in two newspapers (one daily, one weekly) for six consecutive weeks in the county where the LLC's office is located. After publication, file a Certificate of Publication with the Department of State. Manhattan and Brooklyn are the most expensive counties.

Source: N.Y. LLC Law § 206

An operating agreement is the internal governance document for an LLC. New York is one of the few states that requires every LLC to have one, even single-member LLCs. It defines ownership percentages, profit distribution, management authority, and what happens if a member leaves or dies.

Source: N.Y. LLC Law § 417

If you operate in New York, form in New York. Delaware formation for a NY-operating business means paying franchise taxes in Delaware AND foreign qualification fees in New York, doubling your costs with no practical benefit. Delaware's advantages (Chancery Court, flexible law) matter for large corporations, not most small businesses.

An LLC or corporation protects personal assets from business debts and lawsuits, provided you maintain the corporate veil. Courts can pierce the veil if you commingle personal and business funds, fail to maintain corporate formalities, or use the entity for fraud. Separate bank accounts and proper record-keeping are essential.

Source: N.Y. Bus. Corp. Law § 630; Morris v. NYS Dept. of Taxation

File Articles of Dissolution with the Department of State ($60 fee for LLCs, $60 for corporations). Before filing, you must wind up affairs, pay outstanding debts, distribute remaining assets, file final tax returns, and cancel all permits and licenses. Failure to properly dissolve leaves you liable for ongoing tax obligations.

Source: N.Y. LLC Law § 705; N.Y. Bus. Corp. Law § 1003

A shareholder agreement governs the relationship between owners of a corporation, including buy-sell provisions, voting rights, and transfer restrictions. Without one, disputes default to the Business Corporation Law, which may not reflect your actual intentions. Every multi-owner business should have one before a dispute arises.

Source: N.Y. Bus. Corp. Law §§ 616, 620

Requirements vary by industry and location. At minimum, most NYC businesses need a general business license from the Department of Consumer and Worker Protection (filing fees vary by type). Specific industries (food service, construction, real estate, healthcare) have additional state licensing requirements. Check your local county clerk for county-level permits.

Source: NYC Admin. Code Title 20

$15.00/hour minimum wage statewide, with overtime at 1.5x for hours over 40 per week. Mandatory paid sick leave (40-56 hours depending on employer size), workers' compensation insurance, disability insurance, and paid family leave contributions. New York also requires sexual harassment prevention training annually.

Source: N.Y. Labor Law §§ 190-199-a, 650-665; N.Y. Workers' Comp. Law § 10

Trademarks protect brand names and logos (federal registration through USPTO, $250-$350 per class). Patents protect inventions (utility patent costs $5,000-$15,000+). Copyrights protect creative works (registration $45-$65). Non-disclosure agreements protect confidential information shared with employees, contractors, or potential partners.

Source: Lanham Act, 15 U.S.C. § 1051; 35 U.S.C. § 101; 17 U.S.C. § 408

A buy-sell agreement is a contract between business co-owners that governs what happens when an owner dies, becomes disabled, divorces, or wants to leave. It sets the purchase price formula and funding mechanism (usually life insurance). Without one, you risk being stuck in business with a deceased partner's heirs or an ex-spouse.

Yes. Every LLC and corporation formed in New York must designate the Secretary of State as an agent for service of process AND maintain a physical address in New York where process can be forwarded. You can also designate a registered agent (a person or company) to receive legal documents on your behalf.

Source: N.Y. LLC Law § 301; N.Y. Bus. Corp. Law § 304

File a Biennial Statement with the Department of State every two years ($9 fee). Maintain a current operating agreement. Keep financial records. If you have employees, file quarterly payroll tax returns. You must also file an annual New York LLC/LLP filing fee return (IT-204-LL), which ranges from $25 to $4,500 based on gross income.

Source: N.Y. LLC Law § 301(e); N.Y. Tax Law § 658(c)(3)

Yes. Form the LLC with the Department of State, transfer assets and contracts from the sole proprietorship to the LLC, update bank accounts, licenses, and vendor agreements. New EINs are required. The process typically takes 2-4 weeks. Existing contracts may require consent to assign.

Source: N.Y. LLC Law § 203

The Corporate Transparency Act requires most small companies to report beneficial ownership information to FinCEN. Beneficial owners are individuals who own 25%+ or exercise substantial control. Companies formed before January 1, 2024 had until January 1, 2025 to file; new companies must file within 90 days of formation. Penalties for non-compliance include fines up to $500/day.

Source: 31 U.S.C. § 5336; Corporate Transparency Act