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New York LLC Formation

Starting a business involves a lot of decision-making. But probably one of the first—and most important—decisions is determining what type of business to form. The types of business structures available to you are based on state laws, but generally include sole proprietorships, partnerships, corporations, and limited liability companies (LLCs).

Each type of business has a variety of advantages and disadvantages. For example, while a sole proprietorship is the easiest to start, it also leaves the owner exposed to personal liability for the business. In contrast, a corporation protects the owner(s) from personal liability but involves complicated paperwork that must be filed with the state government. In addition, corporations must observe various formalities in order to maintain their corporate status.

An LLC can be described as a hybrid of these two types of business, which is the reason this business structure is popular among entrepreneurs. LLCs offer flexibility in terms of organizational structure, pass-through taxation, and the protection that you can depend on to keep your personal assets safe in the event of a lawsuit against your company.

Steps for Starting Your Own New York LLC

Forming a New York LLC is not a complicated process but there are several requirements that you have to meet. The LLC formation process can be broken down into a few, simple steps.

Step 1: Name Your NY LLC

You'll need to pick a name for your LLC that both attracts potential customers to your business and complies with the state law requirements for LLC names. If you haven't already, you should have a brainstorming session. Come up with as many business names as you can and write them all down.

Next, you'll need to take the LLC laws into consideration. One important aspect of New York LLC laws is that your name must be distinguishable from the other business names on record with the state. This means that your LLC name must be different from the other names that have been filed already. How would you know if a name you like for your LLC has already been registered or reserved? You'll need to check the state business name database for name availability. A simple name search should reveal if a name you like is already taken, and you can choose a different name.

Also note that your LLC name must include one of the following terms or abbreviations:

  • Limited Liability Company
  • LLC
  • L.L.C.

Step 2: Appoint Your Registered Agent

In New York, the Secretary of State is automatically appointed as your registered agent. This means that the Secretary of State is on file to receive legal papers that are served in connection with a lawsuit against your company. However, you can still choose a registered agent, as well, if you'd prefer to do so. If you choose, for example, to use a registered agent service, then the Secretary of State will forward the legal documents to your designated registered agent.

Note that, if you choose to select a registered agent in addition to the Secretary of State, you need to pick a person or company that is available during normal business hours and has a physical street address for service of process.

Step 3: File Your LLC Articles of Organization

You'll need to file New York LLC Articles of Organization in order to officially form your NY LLC. To get started in the process of filing your formation documents, you need to either create an account for online filing or download the Articles of Organization form. You'll also need to submit the filing fee of $200 to the New York Department of State.

Step 4: Publish Your Notice

New York has publication requirements for LLCs. In accordance with the laws of New York, you'll have to publish notice of your LLC formation in two newspapers within 120 days of the formation of your company. The notices must be run for six consecutive weeks, after which you'll receive an affidavit of publication.

Note that the newspaper in which you run your publication notice must be in the county in which your LLC office is located in order to comply with New York LLC publication requirements. You'll also need to file the Certificate of Publication with the New York Department of State, and include the filing fee of $50 for your filing.

Step 5: Draft an Operating Agreement

Unlike other states, New York requires LLCs to have an operating agreement for the organization. LLC operating agreements are internal documents that aren't filed with the state, but they're still quite important for LLC members and managers.

LLC operating agreements often cover ownership, liabilities, rights and responsibilities of the members, admission of new members, voting powers, and dissolution of the LLC. Keep this document in a safe place for reference in case of any type of dispute or conflict within the organization.

Step 6: Get an EIN

An EIN (Employer Identification Number) or Tax ID number is a number assigned to business entities by the IRS (Internal Revenue Service) for identification purposes. You can think of it as a social security number for your small business. You'll need this number in order to hire your employees and open a business bank account. Don't worry about additional fees or expenses—an EIN is free. You can apply online through the IRS website.

Frequently Asked Questions (FAQs) About NY LLC Formation

1. Do I need to get business licenses or permits for my New York LLC?

You may need to get a business license or permits in order to comply with state and local requirements, depending on the type of business that you're running and the location of that business. If you're unsure at all, you should contact the state and local agencies in your area about licensing requirements for your particular type of business.

2. Do I need to file an annual report or pay an annual fee for my New York limited liability company?

New York LLCs are required to file a biennial statement with the New York Department of State every two years. This biennial report costs $9 to file.

3. How much does it cost to start an LLC in New York?

It costs $200 to file the Articles of Organization that form your LLC with the New York Department of State. Don't forget to factor in the cost of the Certificate of Publication and the publication costs which can vary by location.

4. Can an LLC be authorized to do business in the state of New York?

An existing LLC that was organized in another state can file paperwork to get authorization to do business in the state of New York. The filing fee for the paperwork is $250.

5. How do I handle my business taxes?

LLC taxes can be a challenge without an accountant. For federal taxes, you'll need to decide if you'll use the default tax status for single-member LLCs or multi-member LLCs. For state tax matters, contact the New York Department of Taxation and Finance.

Note: State laws are always subject to change through the passage of new legislation, rulings in the higher courts (including federal decisions), ballot initiatives, and other means. While we strive to provide the most current information available, please consult an attorney or conduct your own legal research to verify the state law(s) you are researching.

New York LLC Formation: Related Resources

If you'd like additional information and resources related to this topic, please click on the links listed below.

Get Legal Help With Your New York LLC Formation Questions

While the information and links above provide good guidance on how to form an LLC, improperly forming your business can expose you to liability. If you have questions about forming an LLC in New York, or simply want the help of a knowledgeable legal professional, it's best to consult with a skilled business organizations attorney in your area.

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