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WHAT TYPES OF BUSINESSES OPERATE IN NEW YORK STATE?
· Must file a Certificate of Incorporation (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).
· Must file Articles of Organization (signed by one or more organizers) with the Department of State.
· Personal liability is generally limited, although the Articles of Organization can specify that member(s) will be liable for company debts, etc.
· 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 owner (in effect, to be treated as a sole proprietorship for federal tax purposes).
· Must file an Assumed Name Certificate (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.
· Must file a Certificate of Limited Partnership (following an agreement of the partners) with the Department of State.
· Personal liability is joint and individual for the general partners who are responsible for the obligations of the partnership; limited partners are liable to the extent of their capital contribution to the partnership.
· The life-span of the business is for a designated period stipulated in the partnership agreement; or until a dissolution event occurs, subject to any right to continue that may be stated in the partnership agreement.
· For purposes of taxation * a limited partnership is not treated as a separate taxable entity; business income is taxed through each partner's personal tax return.
· Must file an Assumed Name Certificate with the clerk of the county/ies in which the business is conducted ONLY 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.