It is impossible to answer this question with the information you provide. Relevant issues include interest vs. investment/contribution vs. distribution, number of "owners," where they are located and tax questions.
New York offers several business formation options. The two most common are the corporation and the LLC. There are several key distinctions between these two corporate forms. Both provide what you're looking for: a "corporate shield" which limits personal liability for the owners/operators of the business. Formation of a corporation can be done in 24 hours for a cost of $125. Formation of the LLC takes much longer, due to the publishing requirement. Depending on what area of NY the business is located, the costs of publishing a notice can be very expensive. (E.g. Manhattan publication vs. a town in upstate NY). Several benefits of the LLC include flexible tax treatment, greater power to the manager of the LLC and easier dissolution. So, it's harder to establish an LLC, but easier to comply with NY laws and easier to get out of, as a rule. I usually recommend to my small business clients with limited start-up capital to incorporate. The NY Department of State website provides the information on the various corporate formation options. Tax issues should be referred to your accountant once you provide greater detail about the business and people involved.
There really is no such thing as a "best option". It all depends on the nature of the business and the identity of its shareholders. Whenever possible, though, one should make a subchapter S tax election when setting up a corporation in order to receive favorable (pass-through) tax treatment. The subchapter S corporation is almost always preferable to the subchapter C corporation for tax purposes. The limited liability company is also typically a pass through entity but is a bit more expensive to set up at the outset when compared to a corporation. All formats (LLC, subchapter S and subchapter C) provide limited liability protection (except in the case of professional entities where the principals remain responsible for the professional negligence).
One caveat if you go with the LLC is to make sure that you actually have an operating agreement prepared for you - especially if you are going to have more than one member of the LLC. The LLC has provided a wonderful business form but it also has some pitfalls. One being that it is very hard to get out of an LLC if you are a minority member. The best way to address the issue is in the operating agreement. State law requires every LLC to have an operating agreement but sometimes people just ignore that and end up in trouble when something goes wrong.