New York Small Business Law
Creating and running a small business requires a lot of effort and knowledge of state and federal regulations. You'll need to know about New York and local building and safety codes, franchise and sales taxes, environmental regulations, etc. A misstep could mean more taxes, fewer profits and potential lawsuits.
For business owners in New York City, Syracuse or Buffalo, it's important to understand state and federal laws and know how to proceed when a legal issue develops. LawInfo has the New York small business law information you need from planning your business structure to buying or selling a business.
New York Business Structures
Before starting your business, you will need to decide upon one of several business structures that are legally recognized in New York. A business structure determines the complexity of the organization and owners' roles and responsibilities, including their financial and tax liabilities.
Among the variety of business structures, the major ones in New York include:
- Sole Proprietorships—A business owned by a single person—often by an independent contractor. The owner is indistinguishable from their business and retains full liability.
- General Partnerships—A business co-owned equally by two or more owners. Each owner is equally and jointly liable for the business and pays business taxes through their personal tax returns.
- Limited Partnerships—A business in which there are general and limited partners (owners). General partners jointly possess the most liability while limited partners possess liability limited by the extent of their investment into the business.
- Corporations—A business owned by multiple shareholders and operated by elected directors. A corporation is its own legal entity with limited liability separate from its shareholders. Shareholders are liable mainly for taxes on their invested shares.
Buying a Small Business in New York
Buying a small business in New York can be a risky gamble if you're not familiar with the various implications. You may end up paying too much for a low return on investment or find yourself inheriting the business's tax debts or legal issues.
A major step in the business buying process is performing your due diligence. This means running a thorough "background check" of sorts on the business. You should have your lawyers and accountants check the business's:
- Financial and tax records,
- Transaction and contracts history,
- Budget and business plans,
- Legal records, including past, ongoing and pending litigation,
- Records indicating compliance with state and federal regulations, and more.
The goal of performing your due diligence is to ensure that you're not buying more problems than you're willing to deal with. A small business attorney can help guide you through the selling process and retrieve some of the data you'll want to collect for due diligence.
Can a New York Attorney Help My Small Business?
A small business owner should get assistance with legal matters as they can ruin a business if mishandled or ignored. Issues like defending against wrongful termination claims or negotiating the acquisition of another company's assets are complex and time-consuming. Retaining an attorney to help prevent legal problems is a wise move.
Speak to an Experienced Business Law Attorney Today
This article is intended to be helpful and informative. But even common legal matters can become complex and stressful. A qualified business lawyer can address your particular legal needs, explain the law, and represent you in court. Take the first step now and contact a local business attorney to discuss your specific legal situation.