Should you form an entityor use an EOR in New York.
In New York, Teamed's EOR lets you hire in days without forming an entity, then converts to your own company through GEMO when ready.
At a glance
New York entity vs EOR, the short version
Forming a New York LLC means paying the state's formation fee and filing an annual franchise tax return based on gross receipts, on top of ongoing compliance work. An EOR skips all of that and lets Teamed carry the legal and tax burden while you hire.
- Minimum franchise tax
- $25
- Franchise tax basis
- gross receipts
- Formation / registration fee
- $200
Setting up in New York
What forming an entity in New York actually involves
To open a New York LLC, you file Articles of Organization with the New York Department of State and pay the state's formation fee. You also need a registered agent, an operating agreement, and you have to satisfy New York's publication requirement, which adds extra cost and paperwork beyond the filing itself.
Once the entity exists, it does not run itself. New York charges an annual franchise tax under Article 9-A, calculated on a gross receipts basis, with a fixed dollar minimum that applies even if the entity barely operates. Add payroll setup, workers compensation registration, and state tax accounts, and a single New York hire can mean weeks of administrative work before anyone starts.
The EOR alternative
How an EOR sidesteps New York's setup work
An employer of record already holds a compliant entity in New York. Teamed employs your worker under that entity, runs payroll, handles the franchise tax exposure, and manages workers comp and state filings, so none of that sits on your company.
This matters most when you are hiring one or two people in New York to test the market, or when you need someone employed compliantly before a formation process could realistically finish. You get a working employee fast, without owning New York's ongoing compliance calendar.
The honest answer
When EOR is the better choice, not just the easier one
An employer of record is sometimes genuinely the better answer, not a lesser one, especially for a small or still-changing team in New York, or while you are testing whether the market is worth a permanent footprint. Talk to a member of the team about your specific plans, and if you want a numbers-based view, run it through the crossover calculator, since the right answer depends on salaries and how long you intend to stay.
Growing into your own entity
Your own entity, when it's time. We set it up, migrate you in, and hand it back intact.
Global Entity and Employment Operations, which we call GEMO, is how Teamed builds your own legal entity when EOR has done its job and you are ready to own the structure directly. We handle this across 100+ countries, so the same process applies whether New York is your first market or your fifth.
In New York, that means Teamed files your Articles of Organization, registers you for franchise tax under Article 9-A, sets up your payroll and compliance accounts, and migrates your existing employees onto the new entity without a gap in their employment or benefits.
Before you commit
Sometimes an employer of record is the better fit
An employer of record is sometimes genuinely the better answer, not a lesser one, especially for a small or still-changing team in New York, or while you are testing whether the market is worth a permanent footprint. Talk to a member of the team about your specific plans, and if you want a numbers-based view, run it through the crossover calculator, since the right answer depends on salaries and how long you intend to stay.
Contractors, employer of record and your own entity all run on one platform at Teamed, so moving between them later does not mean changing provider or re-onboarding anybody. Real HR and legal experts handle the work rather than a ticket queue.
Talk to a member of the team and we will tell you plainly which one suits where you are. If you would rather look at the numbers yourself first, the crossover calculator models it on local salaries and employer costs rather than on a headcount rule of thumb.
Who carries it
Your own entity, when it's time. We set it up, migrate you in, and hand it back intact.
Global Entity and Employment Operations, which we call GEMO, is how Teamed forms your company, registers it for tax and payroll, runs it month to month and keeps its filings current, across 100+ countries. You stay the employer. We do the work behind it.
In New York, that means Teamed files your Articles of Organization, registers you for franchise tax under Article 9-A, sets up your payroll and compliance accounts, and migrates your existing employees onto the new entity without a gap in their employment or benefits.
They set up our EU entity and moved hires across without missing a payroll.
Questions
New York entity and EOR questions
How much does it cost to form an LLC in New York?
You pay a formation fee to the New York Department of State when you file your Articles of Organization. Beyond that, New York also requires a publication step and an operating agreement, which add further cost that isn't part of the filing fee itself.
What is New York's franchise tax and who pays it?
New York charges an annual franchise tax under Article 9-A, calculated on a gross receipts basis. Even entities with little activity owe a fixed dollar minimum, currently set at a minimum figure by the New York State Department of Taxation and Finance, so the tax applies whether or not the entity is profitable.
Is using an EOR legal in New York?
Yes, employer of record arrangements are a recognized way to employ staff without forming your own entity. The EOR, not your company, holds the legal employment relationship and carries the related state registrations and tax obligations.
How long does it take to set up a New York entity?
Timelines depend on filing processing, registered agent setup, and completing New York's publication requirement, and they can shift with state processing volumes. An EOR avoids this timeline question entirely because the entity already exists and employment can start immediately.
When should I move from an EOR to my own New York entity?
There's no fixed headcount trigger. It depends on your salary levels, how long you plan to stay in New York, and how much you want to own the compliance directly, so the crossover calculator or a conversation with the team is a better guide than a rule of thumb.
Where these figures come from
Sources
These figures are drawn from the New York State Department of Taxation and Finance and the New York Department of State.
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