Entity Formation & Structuring

Start Your NY Business on Solid Legal Ground with Expert Guidance

Entrepreneurship thrives in New York City. In 2023, New York City entrepreneurs launched 28,000 startups and small businesses. However, selecting and properly forming the appropriate legal entity for your new New York business is critical for long-term success. Your initial business structuring decision affects liability, operations, taxation, and future growth potential. Experienced business formation lawyer New York Daniel Weberman, provides business owners like yours with the New York entity selection and formation process.

Why Seek Legal Counsel for Entity Formation & Structuring in New York?

Our experienced New York City corporate attorney, Daniel Weberman, will provide vital assistance to your startup in these areas of entity formation and structuring:

Navigating Complex Entity Choices

Selecting the proper business entity – whether an S-Corp, LLC, sole proprietorship, or partnership – requires understanding each option’s legal and operational implications under state and federal law. LLCs offer flexibility in management and pass-through taxation, while S-Corps and C-Corps provide liability protection but differ in tax treatment and ownership restrictions. Sole proprietorships offer simplicity but lack any liability protection for your personal assets.

Ensuring Proper Formation and Compliance

Forming your business entity in New York involves filing with the New York Department of State, such as Articles of Organization for an LLC or a Certificate of Incorporation for a corporation. Errors in these documents can jeopardize legal recognition. Additionally, New York imposes unique requirements, such as the LLC publication rule, where new LLCs must publish notices in two newspapers for six weeks, a step often overlooked if you attempt this process without a NY corporate lawyer.

Establishing Limited Liability Protection

A big plus of forming an LLC or corporation in New York is that it gives you a robust legal shield that protects your assets from business debts and lawsuits. However, this protection depends on proper formation and adherence to corporate formalities: maintaining separate bank accounts, holding regular meetings, and documenting major decisions. Without these, courts may “pierce the corporate veil,” exposing your owner’s personal liability. Attorney Weberman will guide your business in setting up and maintaining these formalities.

Drafting Foundational Agreements

Well-drafted internal agreements, such as Operating Agreements for LLCs, Bylaws for corporations, or Partnership Agreements, are essential for governing your company’s operations and preventing disputes. These documents detail ownership roles, profit distribution, decision-making processes, and exit strategies. In New York, where courts often defer to these agreements in disputes, vague or absent contracts can lead to costly litigation or operational paralysis. Your business entity formation attorney tailors these documents to your specific needs, ensuring clarity and compliance with NY law.

Understanding Tax Implications

Your business entity choice significantly impacts federal and New York state taxation. LLCs and partnerships typically enjoy pass-through taxation, avoiding the double taxation faced by C-Corps. S-Corps offer pass-through benefits but require specific elections with the IRS. Your business attorney collaborates with tax professionals to align entity structure with tax strategies.

Remember, many potential pitfalls await the business owner attempting to form a business entity independently. You may file incorrectly, miss compliance steps, or write subpar internal agreements, which can endanger your business later.

Call us today

Expert legal guidance for entrepreneurs, startups, and established businesses — contracts, compliance, disputes, and beyond.

Schedule a Consultation

How We Assist with Entity Formation & Structuring

Skilled corporate business attorney Weberman will assist with your business formation in these ways:

Entity Selection Consultation: Attorney Weberman will evaluate your specific needs, growth objectives, and risk tolerance to recommend the preferred business structure, ensuring compliance with New York’s Business Corporation Law or Limited Liability Company Law, and minimizing future restructuring costs.
Formation Document Preparation and Filing: Your business lawyer will handle the preparation and submission process, ensuring accuracy and compliance with statutory requirements. This includes details such as the registered agent’s designation and purpose clauses, to establish a solid legal foundation for the entity.
Drafting Internal Governance Documents: He will write tailored agreements that reflect your startup’s unique structure and goals, ensuring compliance with NY law and reducing the risk of internal disputes that could derail your operations.
Managing NY LLC Publication Requirements: Daniel will oversee the entire publication process, including selecting approved newspapers and filing the required Certificate of Publication with the New York Department of State. These actions ensure that your company fully complies with and preserves your LLC’s legal standing.
Obtaining Employer Identification Numbers (EINs): You typically need a federal EIN to open a bank account, hire employees, and file state and federal taxes. Daniel will help you promptly and accurately obtain the EIN, ensuring your business is correctly registered for federal tax purposes and ready for operational needs. He can also assist with obtaining your business license.
S-Corporation Elections: Your New York corporate attorney will advise you on the benefits and drawbacks of S-Corp status, prepare the necessary filings, and ensure alignment with federal and New York tax requirements.
Foreign Entity Qualification: Daniel will streamline your firm’s qualification process, ensuring proper registration and compliance with NY’s regulatory framework.
Initial Compliance Guidance: Your qualified attorney will guide these foundational tasks, ensuring adherence to New York’s Business Corporation Law or Limited Liability Company Law. His legal expertise will establish proper governance structures and position your entity for long-term success.

Key Considerations in Entity Formation & Structuring

Your startup needs to consider many factors when forming and structuring its entity. Attorney Weberman can assist as you review the following points:

Choosing the Right Entity Type (LLC, S-Corp, C-Corp, Partnership)

As noted earlier, the business structure you should use, such as an LLC, S-Corp, C-Corp, or partnership, depends on your business goals, ownership plans, and operational requirements. Many businesses choose C corporations, but Daniel will thoroughly explain your options.

Personal Liability Protection Strategies

Forming an LLC or corporation in New York creates legal protection for your company, but it must be adequately formed, including correct Articles of Organization or Certificates of Incorporation. Your firm must also maintain corporate formalities, such as having separate bank accounts, holding regular meetings, and documenting decisions.

Federal and New York Tax Implications

Your entity selection significantly impacts federal and New York state taxation. LLCs and partnerships typically enjoy pass-through taxation, avoiding the double taxation faced by C corporations, while S corporations offer pass-through benefits with specific IRS elections.

Management Structure and Operational Flexibility

The entity type determines your management structure and operational flexibility under New York law. LLCs allow for customizable management, providing more agility, while C corporations require setting up a formal board of directors and officers.

Ownership and Control Arrangements

Ownership and control arrangements differ in each entity and must be clearly defined to prevent legal disputes. For instance, LLCs allow for flexible ownership through membership interests, while corporations issue shares, with control tied to share classes and voting rights, governed by Bylaws.

New York LLC Publication Requirements

New York law requires that your new LLC publish a notice of formation in two approved newspapers for six consecutive weeks, a unique requirement under the Limited Liability Company Law. Non-compliance risks suspension of your LLC’s authority to operate.

Future Capital Raising Needs

Your entity selection also affects your company’s ability to raise money in New York. Selecting a C-Corp is often appropriate for public offerings or venture capital due to its ability to issue multiple share classes.

Drafting Essential Operating/Shareholder/Partnership Agreements

Your firm’s internal governance documents, such as Operating Agreements for LLCs, shareholder agreements, bylaws for corporations, and Partnership Agreements, are vital for defining roles, distributing profits, making decisions, and resolving disputes. Well-written and tailored contracts will be compliant with New York regulations.

Our Approach to Client Support

Attorney Weberman is a skilled corporate governance lawyer and approaches his business formation clients as follows:

Consultation & Business Assessment: Daniel will ensure that he understands your business concept, business ownership team, funding plans, and long-term objectives, to ensure financial success and compliance with New York and federal laws.
Entity Recommendation & Strategy: Your business formation attorney will offer clear guidance on the legal entity he recommends and outline how to form it correctly.
Efficient Document Preparation and Filing: Daniel will compose and oversee all required business entity filing paperwork, submitting it promptly to the state.
Post-Formation Counsel: Your business formation lawyer will help you with the early organizational steps and provide the core foundational internal agreements for your business formation.

Business formation attorney in New York Daniel Weberman looks forward to assisting you with your company’s needs.