Compare your options
| Structure | Best for | Protects personal assets? | How it's taxed |
|---|---|---|---|
| Sole proprietorship | One owner, starting small | No | On your personal return (Schedule C) |
| LLC | Most small businesses, one owner or many | Generally, yes | Flexible — like a sole proprietorship or partnership by default, or can elect corporate treatment |
| Partnership | Two or more owners sharing profits | Not for general partners | Partnership return (Form 1065); each partner gets a K-1 |
| S-Corp election | Profitable businesses paying the owner a salary | Comes from the LLC or corporation | Profits pass through to owners; owner salaries run through payroll |
| C-Corporation | Businesses raising outside investment | Yes | Corporate return (Form 1120); dividends are taxed again to shareholders |
Sole proprietorship
- Best for
- One owner, starting small
- Protects personal assets?
- No
- How it's taxed
- On your personal return (Schedule C)
LLC
- Best for
- Most small businesses, one owner or many
- Protects personal assets?
- Generally, yes
- How it's taxed
- Flexible — like a sole proprietorship or partnership by default, or can elect corporate treatment
Partnership
- Best for
- Two or more owners sharing profits
- Protects personal assets?
- Not for general partners
- How it's taxed
- Partnership return (Form 1065); each partner gets a K-1
S-Corp election
- Best for
- Profitable businesses paying the owner a salary
- Protects personal assets?
- Comes from the LLC or corporation
- How it's taxed
- Profits pass through to owners; owner salaries run through payroll
C-Corporation
- Best for
- Businesses raising outside investment
- Protects personal assets?
- Yes
- How it's taxed
- Corporate return (Form 1120); dividends are taxed again to shareholders
An S-Corp is a tax election, not a separate type of company. An LLC or corporation chooses it by filing Form 2553 with the IRS.
Business setup & licenses
- Getting your Employer Identification Number (EIN) from the IRS
- New York State tax registration
- Sales tax Certificate of Authority, if you'll sell taxable goods or services
- Identifying the city and state licenses and permits your industry needs
- The documents your bank asks for to open a business account
LLC & corporation formation
- Filing Articles of Organization (LLC) or a Certificate of Incorporation with the New York Department of State
- New York's LLC publication requirement — new LLCs must publish a notice in two newspapers within 120 days of forming, then file a Certificate of Publication
- Operating agreement or bylaws basics
- Filing the S-Corp election (Form 2553) when it makes sense for you
Partnership formation
- Setting up a general partnership or a multi-member LLC
- Partnership agreement essentials: ownership percentages, how profits are split, and what happens if a partner leaves
- EIN and New York State registration
- Your first partnership return (Form 1065) and partner K-1s
Common questions
Do I need a lawyer to start a business?
Not to form a basic LLC or corporation. For agreements between partners or investors, we recommend having an attorney draft or review the document.
How much does New York's LLC publication cost?
It depends on the county and the newspapers chosen, and it can vary a lot. We'll explain your options before you commit.
When should I elect S-Corp status?
Usually once the business is consistently profitable enough to pay you a reasonable salary. We'll run the numbers with you before you file.