The New York State Returnable Container Act, also known as the "Bottle Bill," imposes a five-cent deposit on certain beverage containers sold in New York. A bottle redemption center is one link in a chain of interactions that makes the bottle bill work. Bottle redemption centers collect bottles from consumers and return them to distributors, earning handling fees in the process. In addition to following the steps for starting any business in New York, a bottle redemption center needs to register with the Department of Environmental Conservation (DEC).
The Business Plan
There are many things to consider when opening a bottle redemption center in New York. Taking the time to write out a complete business plan will help to ensure that you do not overlook important considerations. In your business plan, you will outline your business' purpose, its legal structure, management, operations, location, equipment and employees. In addition, you will analyze the market to see where your business will fit into the needs of your region.
Choosing Your Location
You will need a building with enough space to accept returns from consumers, sort and process the containers and store the containers until they are returned to distributors. It would be beneficial to separate these areas for safety and security reasons. In the bottle return center, you will need a method of counting the containers, whether manually by an employee or with a reverse vending machine.
You will need areas to sort and store containers until they are returned to the distributor. Your redemption center might opt to take them directly to where they are headed by employing your own drivers. However, some redemption centers contract with third-party pickup service instead.
Navigating The Legalese
Contact your county clerk to make sure you have the appropriate business license. Then file the Notification Form for Redemption Center Registration with the New York State DEC. If you will be a limited liability company or a corporation, take the necessary additional steps. Regardless of entity type, consider general and liability insurance.
If you will hire employees, obtain an employer identification number (EIN) from the Internal Revenue Service. The IRS issues EINs online Monday through Friday from 7 a.m. to 10 p.m. Eastern Standard Time. Register with the New York Department of Taxation and Finance to pay state withholding tax. You also must register with the New York Department of Labor to pay unemployment taxes. Be aware of requirements for workers compensation insurance and health insurance.
Forming a Limited Liability Company
A limited liability company protects your personal assets by limiting your liability to the investment in the company. You can organize as a single-member LLC or with partners. Consult with a lawyer and a tax advisor before choosing this route and before determining how you want your LLC treated for tax purposes. To form an LLC, you will need to file Articles of Organization with the New York Department of State, Division of Corporations, State Records and UCC.
LLCs in New York are required to adopt a written operating agreement between the partners. Additionally, LLCs must publish the Articles of Organization in two newspapers and provide proof to the Department of State. Since an LLC is a separate legal entity, it must have an EIN, whether or not you choose to hire employees. This EIN serves to identify the LLC entity in the same way your Social Security number identifies you. Be sure to file the correct paperwork if you want your LLC treated as a C corporation or S corporation rather than a sole proprietorship or partnership for tax purposes.
In New York, LLCs will receive the same tax treatment chosen for federal purposes. However, S corporations must send Form CT-6 to the Department of Taxation to receive state S corporation treatment.
Forming a Corporation
If you will organize as a corporation, you must file a Certificate of Incorporation with the Department of State. A corporation must hold an organizational meeting to adopt bylaws, elect directors and handle any other necessary organizational business. The corporation must keep complete books, including recording the minutes of any shareholder, director or executive meetings.
The books must also contain a record of all shareholders and their number and class of shares held. It is strongly recommended that you consult a lawyer during the formation of a corporation. Similarly to an LLC, your corporation will need an EIN.
- New York Department of Environmental Conservation: New York's Bottle Bill
- New York Department of Environmental Conservation: What is a Redemption Center and How Do They Work?
- New York Business Express: How to Start a Business in New York
- Small Business Administration: Write Your Business Plan
- New York Department of Taxation and Finance: Register or Renew
- New York Department of State: Forming a Limited Liability Company in New York
- New York Department of State: Forming a Business Corporation in New York
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