United States

Starting a Business in

United States

Listed below is a detailed summary of the bureaucratic and legal hurdles an entrepreneur must overcome in order to incorporate and register a new firm, along with their associated time and set-up costs.  It examines the procedures, time and cost involved in launching a commercial or industrial firm with up to 50 employees and start-up capital of 10 times the economy's per-capita gross national income (GNI).

The information appearing on this page was collected as part of the Doing Business project, which measures and compares regulations relevant to the life cycle of a small- to medium-sized domestic business in 183 economies. The most recent round of data collection for the project was completed in June 2011.

  • Standardized Company

  • Legal Form: Limited Liability Company
  • City: New York City

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No. Procedure Time to Complete Associated Costs
1 Reserve the company's business name (optional), file the company's articles of organization and adopt the company's operating agreement

The founders may, but are not required to, reserve the name of the company with the New York State Department of State, Division of Corporations, prior to filing the company's articles of organization. To reserve a name, the founders should file an Application for Reservation of Name. The fee for filing this application is USD 20. The application holds the name for 60 days and may be extended twice for additional periods of 60 days. In order to extend the name reservation, the founder needs to submit a written request for the Extension of the Application for Reservation of Name prior to the expiration of the current reservation. The filing receipt entitled “Certificate of Reservation” issued by the Department of State for an Application for Reservation of Name must also accompany any request to extend the name reservation.The fee to extend the reservation of name is also USD 20.

The founders must file the company's articles of organization with the New York State Department of State, Division of Corporations. Forms can be purchased at a legal supply store or downloaded from the depatment's Web site. Application processing time is about 2 weeks. However, optional expedited processing is available according to the following fee schedule:
- 2-hour turnaround: USD 150 (additional fee).
- Same-day service: USD 75 (additional fee).
- 24-hour turnaround: USD 25 (additional fee).

 1 day USD 275 (USD 200 filing fee, USD 75 expedited service fee)
2 Apply for federal identification number (EIN) for tax and employer purposes

To apply for the federal employer identification number ("EIN"), used for tax and employer purposes, founders must file IRS Form SS-4 (available from the US Internal Revenue Service). Applicants may apply online (processing time: immediate), by telephone (processing time: immediate), by fax (processing time: 4 business days) or by mail (processing time: 4 weeks). If applicants apply online, they do not need fill out IRS Form SS-4.
1 day no charge
3 Register to collect State sales tax

A company selling "tangible personal property (goods), as well as certain other goods and types of services" must register as a sales tax vendor at least 20 days prior to starting business in New YorkState. To register, the founders must file Form DTF-17 or register online at the Web site of the New York State Department of Taxation and Finance. After the company has registered, it generally must file quarterly sales and use tax returns regardless of whether it has started or done any business.
1 day no charge
4 Register as an employer with the Unemployment Insurance Division of the state Department of Labor

Founders must register as an employer by completing Form NYS-100 so that the New York State Department of Labor may determine if the company is liable under the New York State Unemployment Insurance Law. If the company is determined liable, the Department of Labor will send the company quarterly combined withholding, wage reporting and unemployment insurance returns for reporting wages paid to the company's employees. General business employers may register online at the New York State Department of Labor Web site or by completing Form NYS-100 and submitting it by mail. Before an employer can register, it must obtain a federal employer identification number from the US Internal Revenue Service. The Form NYS-100 can also be submitted by fax.
1 day no charge
5 Arrange for workers' compensation insurance and disability insurance

As an employer, founders must obtain and maintain workers' compensation insurance and disability insurance for their employees by purchasing a workers' compensation insurance policy and a disability benefits insurance policy from an authorized private insurance carrier or by another approved means. The company's federal employer identification number ("EIN") is the company's primary identification with respect to communications with the Workers' Compensation Board (the "Board"). The company must give its EIN to its insurance carrier when obtaining or maintaining its workers' compensation or disability coverage. Workers' compensation insurance floor is calculated using each employee's risk classification, salary, and total payroll.
1 day no charge
6 Arrange for publication and submit certificate and affidavits of publication

A new limited liability company must publish two notices within 120 days of the entity’s formation. Entities must also file two affidavits and one certificate of publication with the New York State Department of State, Division of Corporations.

1 day USD 400
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