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Business entity formation
LLC and Corporation Formation in New York
Choosing the right business entity is one of the most important decisions a new business owner makes. The structure you choose affects your liability exposure, tax obligations, governance requirements, and ability to raise capital. Parandian Law advises entrepreneurs, startups, and foreign-owned businesses on entity selection and handles the full formation process in New York.
We draft operating agreements, bylaws, and shareholder agreements that reflect the actual intentions and expectations of the founders, protect each owner’s interests, and anticipate the disputes and transitions that commonly arise in closely held businesses.
Formation is not just a filing. A properly structured entity with well-drafted governing documents is the foundation for everything that follows, from hiring employees and signing contracts to bringing in investors and eventually selling the business.
LLC · S-Corp · C-Corp · Operating Agreement · Bylaws · Shareholder Agreement · New York Formation · Foreign-Owned · Single Member · Multi-Member
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Choosing the right entity
Entity formation — the essentials
New York businesses most commonly organize as limited liability companies, S-corporations, or C-corporations. LLCs offer flexibility, pass-through taxation, and simpler governance, making them the most popular choice for small businesses, professional practices, and real estate investors. S-corporations offer pass-through taxation with some payroll tax advantages but come with restrictions on ownership and share classes. C-corporations are preferred for venture-backed startups and businesses with complex equity structures or plans to go public.
The governing documents are as important as the entity type. An LLC operating agreement defines the rights and obligations of each member, the allocation of profits and losses, the rules for transferring membership interests, and the process for dissolving the company. A shareholders agreement for a corporation addresses similar issues including buy-sell provisions, drag-along and tag-along rights, and voting arrangements. We draft these documents to reflect the specific business and the specific relationship between the owners.
Key FACTS
LLC filing fee:
$200 (NY Articles of Organization)
Corp filing fee:
$125 (NY Certificate of Incorporation)
Publication requirement:
LLCs must publish in two newspapers
Publication cost:
$1,000 to $2,000 depending on county
S-Corp election:
Filed with IRS after state formation
Single member LLC:
Disregarded entity for federal tax
EIN:
Required for all business entities
NY registered agent:
Required for all entities
What we handle
Entity formation services
Business entity formation and governing document drafting for New York entrepreneurs and business owners.
LLC formation
New York LLC formation including Articles of Organization filing, operating agreement drafting, EIN procurement, and publication compliance. We draft operating agreements that protect each member’s interests and reflect the specific business arrangement.
Corporation formation
New York corporation formation including Certificate of Incorporation filing, bylaws drafting, organizational minutes, stock issuance, and S-Corp election where applicable. We advise on share structure and initial capitalization.
Foreign-owned U.S. entities
Entity formation for foreign nationals and foreign companies establishing a U.S. presence, including structure analysis, registered agent setup, EIN procurement for foreign owners, and bank account guidance.
Operating agreement and shareholder agreement drafting
Standalone drafting of LLC operating agreements and corporate shareholder agreements for existing entities, including amendment and restatement of outdated or inadequate governing documents.
How it works
Our formation process
01
Entity selection consultation
We discuss the business structure, ownership, tax situation, and long-term goals, and advise on the right entity type and state of formation for the specific business.
02
State filing
We prepare and file the Articles of Organization or Certificate of Incorporation with the New York Department of State and handle the registered agent designation.
03
Governing documents
We draft the operating agreement or bylaws and shareholders agreement, tailored to the specific business and ownership structure. We walk through every material provision with the client before finalizing.
04
Post-formation compliance
We advise on EIN procurement, S-Corp election timing, bank account setup, publication compliance for New York LLCs, and any licenses or permits required for the specific business.
Common questions
Entity formation FAQ
Should I form an LLC or a corporation?
For most small businesses, professional practices, and real estate investors, an LLC is the right choice. LLCs offer liability protection, pass-through taxation, and flexible governance without the formality requirements of a corporation. Corporations are preferred when the business plans to raise venture capital, issue multiple classes of stock, or eventually go public, since VCs typically require C-corporation structure. S-corporations can offer payroll tax advantages for profitable businesses with a single owner or a small number of owners, but come with restrictions on the number and type of shareholders. We advise on the specific tradeoffs based on the business model, tax situation, and long-term goals.
What is the New York LLC publication requirement?
New York requires LLCs to publish a notice of formation in two newspapers designated by the county clerk of the county where the LLC’s office is located, once a week for six consecutive weeks. After publication the LLC must file an Affidavit of Publication with the Department of State. Failure to comply within 120 days of formation results in suspension of the LLC’s authority to carry on business. Publication costs vary significantly by county. Manhattan and other New York City counties are among the most expensive, ranging from $1,000 to over $2,000. We handle the publication process as part of our LLC formation service.
I am a foreign national. Can I own a U.S. LLC or corporation?
Yes. Foreign nationals and foreign companies can own U.S. LLCs and corporations. The formation process is largely the same as for U.S. citizens, with some additional considerations. Foreign owners need an Individual Taxpayer Identification Number or EIN, and may face additional documentation requirements when opening a U.S. bank account. Foreign-owned LLCs and corporations also have specific federal tax reporting obligations, including Form 5472. We advise foreign owners on the formation process and coordinate with their tax advisors on ongoing compliance obligations.
Do I need an operating agreement if I am the only member of my LLC?
Yes. Even if you are the sole member of an LLC, an operating agreement is important for several reasons. It establishes that the LLC is a separate legal entity from you personally, which supports the liability protection the LLC is supposed to provide. It also addresses what happens to the LLC if you become incapacitated or pass away. Some banks require an operating agreement to open a business account. New York law does not require an operating agreement but strongly implies that one should exist. We draft single-member operating agreements as part of every LLC formation.
Related services
Often considered alongside Business Formation
Ready to form your business?
Entity selection and governing documents set the foundation for everything that follows. Speak with an attorney before filing anything.
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