How to Start an LLC in New York | 2024 Guide

Start a LLC in New York

How to Start an LLC in New York: If you’re looking to launch a business in New York, starting a Limited Liability Company (LLC) may be the right choice for you. An LLC provides personal liability protection for its owners while giving them flexibility in managing and taxing the business. This guide provides a step-by-step process for starting an LLC in New York. From choosing a unique name to registering with the state and obtaining necessary licenses and permits, Webinarcare Editorial Team will walk you through setting up your new business entity. So grab a pen and paper, and let’s get started!

What is a Limited Liability Company?

A Limited Liability Company (LLC) is a type of business entity that combines a corporation’s limited liability protection with a partnership’s tax benefits. LLCs are popular among small business owners for their flexibility and ease of formation. In New York, an LLC must have a unique name and file Articles of Organization with the Secretary of State. Depending on their business needs, LLCs may also elect to be taxed as a corporation or an S-corp. Owners of an LLC, called members, are not personally liable for the company’s debts and losses, and the company’s profits and losses are passed through to the member’s personal tax returns. This makes an LLC an attractive option for those seeking personal liability protection and simplified taxation.

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Steps on How to Start an LLC in New York

To form an LLC for your business, you must follow the guidelines that include naming your LLC, hiring a Resident Agent, filing your Articles of Organization, creating your LLC operating agreement, getting an employer identification number, opening a bank account and getting business licenses and permits.

Step 1: Name your LLC in New York

After you have decided on the idea to form an LLC in New York, deciding the name for your LLC is significant. There is a complete guide on LLC name guidelines for you to have a proper LLC business name. Here are some regulations you must follow while naming your LLC,

  • The name should not be confused with a government entity.
  • The name should be unique.
  • The name should be available to use.
  • Any other business does not use the name.
  • The new name must include “LLC” if it is a limited liability company.

In New York, if you do not wish to file your LLC right away but want to hold the name that you have decided on, then you can reserve your LLC name for 60 days. You must file a name reservation application in New York Secretary of State to keep the name.

Recommended: We recommend a professional service that can offer you unlimited name search, trademark and copyright registration at a reasonable price. We recommend using –

LegalZoom($0 + State Fees for LLC Formation)

You can register your business under a different legal name if your preferred name isn’t available. Once you have chosen a name, you can submit an application for filing New York DBA (doing business as). In this manner, you can choose any name you desire for your business. A DBA allows a company to operate under the name of the person or entity who owns it. If you have decided to file for a DBA, you can file it in two methods, by mail and in person. However, before filing a DBA, you should know that you need to renew your DBA from up to Indefinite, which costs around $25.

Step 2: Hire a Resident Agent in New York

Hiring a Resident Agent in New York is a must since a Resident Agent is a person or business entity responsible for receiving important legal documents on behalf of your New York LLC. Most states require you to designate a Resident Agent when forming your LLC.

The qualifications of a Resident Agent vary depending on the jurisdiction. Still, generally, a Resident Agent must meet the following criteria:

  • Availability: A Resident Agent must be available during regular business hours to receive and process legal documents and official correspondence.
  • Physical Address: A Resident Agent must have a physical street address within the state where the LLC is registered. This address, known as the registered office, cannot be a P.O. Box.
  • Residency or Authorization: For individuals serving as Resident Agent, they must be residents of the New York where the LLC was formed. A business entity acting as a Resident Agent must be authorized to do business within that state.
  • Age: A Resident Agent must be at least 18 years old.
  • Good standing: A Resident Agent should not have any legal or financial issues that impede their ability to fulfill their duties.

Choosing a reliable and responsible Resident Agent is essential, as failure to receive and respond to legal documents can seriously affect your business. Some businesses use professional Resident Agent services to ensure compliance and proper handling of legal matters.

However, if you would like to have an easier process in filing the necessary documents, you can get New York Resident Agent Services.

Step 3: File your Articles of Organization in New York

The Articles of Organization for an LLC is an important document to start your limited liability company (LLC). New York Articles of Organization is a simple document that contains the business name and address as well as the name and address of the person who received lawsuits on behalf of the organization.

Here are the guidelines and specific requirements in filing your Articles of Organization in New York.

1. Obtain the Necessary Forms: Visit the New York’s business filing office website, usually the New York Secretary of State’s office, to download the required forms or file online.

2. Provide the Required Information: Fill in the necessary details in the form, which typically include:

  • The name of your LLC (must include an LLC designator such as “LLC,” “L.L.C.,” or “Limited Liability Company”)
  • The purpose of your LLC (a general statement or specific business activities)
  • The address of your LLC’s principal place of business
  • The name and address of your registered agent (the person or business entity responsible for receiving legal documents on behalf of your LLC)
  • The management structure of your LLC (member-managed or manager-managed)
  • The duration of your LLC, if not perpetual
  • The names and addresses of the LLC’s organizers or members

3. Sign and File the Form: Submit the completed form in the {state} state office, either by mail, in person, or online. You may mail it at Department of State Division of Corporations, State Records and Uniform Commercial Code, One Commerce Plaza, 99 Washington Ave., Albany, NY 12231.

4. Pay the Filing Fee: When you submit your Articles of Organization, you’ll need to pay a filing fee of $200. Make sure to check and include the correct payment with your submission.

5. Receive Confirmation: After your Articles of Organization have been filed and processed, you’ll receive a confirmation from New York, typically a stamped and approved copy of the document or a Articles of Organization.

Recommended: Filing formation papers is easy and hassle-free if you hire a professional service. We recommend using –

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Once you have successfully filed your Articles of Organization and it has been approved, your New York LLC is officially formed. However, remember to complete additional steps, such as creating an Operating Agreement, obtaining an EIN, and registering for any required licenses and permits.

Step 4: Create Your New York Operating Agreement

An operating agreement is a document that contains all of your company’s organizational details. Drafting an operating agreement in most states is not required. Yet, having one as an internal document is strongly advised. An operating agreement includes information like-

  • About Business
  • Members and management
  • Capital contribution
  • Profit Distribution
  • Change of membership
  • Dissolution

To understand how an operating agreement works, you should check out how to create an operating agreement in New York.

Recommended: Get oprating agreement drafts ready on your table with a help of a professional service. We recommend using –

LegalZoom($0 + State Fee for LLC formation)

Step 5: Get an EIN

After documenting the operating agreement, you should get or request an Employer Identification Number (EIN) in New York. An EIN will serve as the tax ID for your professional corporation. EIN can be obtained from the Internal Revenue Service (IRS). It is a 9-digit number similar to Social Security Number. EIN, however, is distinct from SSN. It is only used for business-related activities, particularly for submitting general taxes. The form must be completed and uploaded to the IRS website.

The application of an EIN in New York can be through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that the Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

In obtaining an EIN for your LLC, you should be aware to ensure that your LLC is eligible for an EIN. You need an EIN if you have employees, operate as a corporation or partnership, or meet other specific IRS criteria. Before applying, gather the required information, including your LLC’s name, mailing address, and the responsible party’s Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN). Also, you can apply for an EIN through various methods, including online, by fax, mail, or telephone (for international applicants).

Recommended: Professional services have the EIN included in their LLC formation package. We recommend using –

LegalZoom($0 + State Fee for LLC formation)

Step 6: Open a Bank Account and Prepare for Taxes

After you have filed for and received your Employer Identification Number, you should open a bank account because you will use this account for yourself, your clients, and your employees.

Your business dealings in New York might be simpler with a US business bank account because it boosts your company’s legitimacy and liquidity. Most banks demand an EIN to create a business bank account for firms other than sole proprietorships. Also, having an EIN makes tax preparation easier. You can anticipate paying employment and corporate taxes with New York LLC.

Opening a bank account is necessary for New York business. If you are still wondering where to open an account in your New York, you should check the Best Bank for Small Business in New York.

Step 7: Get a Business and License Permit

You must get a business license in New York before establishing your LLC. A business license is a legal document granted by a state government body that permits you to conduct business within the area under its jurisdiction. The price of business licenses and permits in New York ranges from $50 – $300. If there is a requirement for a specific license or city-based permit, you must inquire with the New York Secretary of State.

Cost to Form an LLC in New York

Even if you have a business name and structure in mind, you should consider whether you can afford the costs of forming an LLC in New York. Articles of Organization costs around $200. The initial filing fee is $200 (by mail and online), and the annual fee is $4.50.

If you forget to pay the annual fee for your New York LLC, you will have a penalty of $250. However, you can check the New York LLC Cost for additional information.

Advantages of Creating New York LLC

Even though some people decide on what to do with their businesses, some choose to put it in their own individual name, while others still choose to set it up via LLC in New York. Important benefits will help you set up an LLC in New York.

  • Pass-Through Taxation: The pass-through structure will make the company not pay twice the tax. Most start-ups and entrepreneurs in New York apply for an LLC because of this structure. Pass-through taxation refers to how income and losses from an LLC (Limited Liability Company) are passed through to its members (owners) for tax purposes rather than being taxed at the business entity level. This means the LLC does not pay federal income taxes; the members’ profits and losses are allocated based on their interests. Each member then reports their share of the LLC’s income or losses on their personal tax returns and pays taxes at their individual tax rates.
  • Ownership Flexibility: If you need sole and primary control over your company’s operations, a sole proprietorship will allow you to do so. If you apply for an LLC in New York with flexibility, you will have default rules set by law and need an operating agreement.
  • Personal Liability Protection: Personal Liability Protection protects your business from damage, debts, or legal obligations. In personal liability protection, the company’s profits and earnings will stay as is even if your company is about to be sued. This protection of having an LLC in New York can also be extended to the company’s properties and assets. Many start-up companies will benefit from this since most are starting to build a company. Even if liability exists, the LLC in New York will protect its assets.

FAQs

What is an LLC?
An LLC or Limited Liability Company is a business structure that offers limited liability and tax flexibility to its owners.
What is the process of forming an LLC in New York?
To form an LLC in New York, one must file Articles of Organization with the New York State Department of State.
Where can I find the Articles of Organization form in New York?
The Articles of Organization form for New York LLCs can be found on the New York State Division of Corporations website.
How much does it cost to form an LLC in New York?
The filing fee for the Articles of Organization in New York is $200.
Can you get same-day LLC formation in New York?
Yes, expedited processing for LLC formation in New York is available for an additional fee of $25.
What are the naming requirements for an LLC in New York?
The name of an LLC in New York must include the words “Limited Liability Company” or “LLC” and cannot include words such as “corporation” or “incorporated.”
Can I reserve a name for my New York LLC?
Yes, the state of New York allows you to reserve the name for your LLC for up to 60 days by submitting a Name Reservation Request with a fee of $20.
Does New York have a publication requirement for LLCs?
Yes, LLCs in New York are required to publish notice of formation in two newspapers in the county where the LLC was organized within 120 days of filing.
Can I do the publication myself?
No, publication must be completed by an attorney or a registered service company.
Is there a deadline for when I should submit the newspaper publication affidavit after completing the publication requirement for my LLC?
Yes, you have to file an affidavit of publication with the New York Department of State within 120 days after completing the publication requirement.
Do I need an operating agreement for my New York LLC?
It’s not required by New York law, but having one is advisable for an LLC in New York.
Where can I find a blank operating agreement for my New York LLC?
There are many online legal service providers that offer a template for a New York LLC operating agreement.
Can I hire employees for my New York LLC?
Yes, you can hire employees for your New York LLC.
What tax documents will my New York LLC need to file?
New York LLCs are required to file State tax documents, such as Form IT-204, Partnership Return.
Does New York have an annual report requirement for LLCs?
Yes, every LLC in New York has to file a Biennial Statement that supplies the name and address of the business owner; it costs $9.
Can I change the name of my New York LLC?
Yes, to change the name of your New York LLC, an amendment certificate must be filed with the New York Department of State.
Can I change or update the owners of my New York LLC?
Yes, an amendment certificate must be filed with the New York Department of State to change or update the owners of your LLC.
Is an LLC required to have a registered agent in New York?
Yes, every New York LLC must designate a registered agent to receive service of process on behalf of the company.
Can I use my home address as the office address of my New York LLC?
Yes, but it’s recommended you use a registered office or a registered agent service address to avoid legal issues.
Can I convert my outside LLC into a New York LLC?
Yes, registered outside LLCs can convert themselves into New York LLCs.
How long does it take for the state to approve an LLC formation application in New York?
It usually takes 10 business days to file and prepare to submit for your LLC formation application in New York.
What is the foreign LLC registration process in New York?
A foreign LLC seeking to start operations in New York must complete an Application for Authority.
What are the registered agent requirements for a foreign LLC in New York?
A registered agent operated in New York, but exemptions are available for certain businesses.
Can I use a DBA name for my New York LLC?
Yes, DBAs are presumptive names; They may be used with written permission of the owner and the registration process is clear.
What is the New York tax rate for LLCs?
A New York LLC’s tax rate is generally 6.5% for general entities, biennial statement $9, and $4,500 for an income of more than $1 million.
What is the annual minutes requirement for New York LLCs?
There is no state requirement for New York LLCs to maintain annual minutes.
Can I create a single-member LLC in New York?
Yes, New York law allows for the formation of single-member LLCs.
Is there a maximum number of members allowed for an LLC in New York?
No, there is no legal LLC category limit or legal operational organ derived limits on the number of members an LLC can have in New York.
What is the difference between a domestic and foreign LLC in New York?
A domestic LLC is an entity formed/operated in New York; while foreign LLC forms an entity outside of New York’s territory, and wants to be present in New York as an exceptional institution.
How can I start an LLC in New York?
You can register your LLC by filing articles of organization with the New York Department of State.
Is it easy to start an LLC in New York?
Starting an LLC in New York is a straightforward process, but it requires careful preparation and attention to detail.
Do I need to have a physical office in New York to start an LLC?
No, you don’t need to have a physical office in New York. You can employ a registered agent to act on your behalf.
Who can be a registered agent in New York?
Any resident or entity authorized to conduct business in New York can act as a registered agent.
Do I need to have a business plan to start an LLC in New York?
While you’re not required to have a formal business plan, it’s a good idea to have some goals and strategies in mind.
Do I need to register my LLC name in New York?
Yes, you’ll need to check if your LLC name is available and register it with the New York Department of State.
How long does it take to start an LLC in New York?
It can take anywhere from a few days to a few weeks or even longer, depending on the workload of the New York State Department of State.
Can I apply for an LLC online in New York?
Yes, you can apply for an LLC online through the New York Department of State’s website.
How much does it cost to start an LLC in New York?
At the current writing, the filing fee for starting an LLC in New York is $200, but the total cost may vary depending on additional expenses.
Do I need to pay annual fees to maintain my New York LLC?
Yes, all LLCs in New York are required to pay a biennial fee of $9 (paid every two years) to keep the company active.
Can anyone get the same DBA as my New York LLC?
No, the name of your LLC DBA is unique to your company and can’t be used by anyone else.
Do I need a business license to operate my LLC in New York?
Depending on the nature of your business, there may be some state or local licenses and permits you will need to obtain before operating your business.
Do I need to file separate tax returns for my New York LLC?
No, an LLC in New York is treated like a pass-through entity by the IRS, which means it isn’t taxed at the business level.
Can I convert my sole proprietorship to an LLC in New York?
Yes, you can convert your sole proprietorship to an LLC by filing articles of organization with the New York Department of State.
Can I form an LLC with my spouse in New York?
Yes, you can form an LLC with your spouse in New York, and it is usually treated as a member-managed.
Do I need to get an operating agreement for my LLC in New York?
An operating agreement isn’t required in New York, but it’s a critical legal document that outlines how your LLC’s operations will work.
Can I have a single-member LLC in New York?
Yes, you can have a single-member LLC in New York, and it’s a popular structure choice for solo entrepreneurs.
Does New York offer any incentives for LLC formations?
New York State has signed the CTA and offers some tax incentives for minority and women-owned businesses; however, it will vary based on the locations in New York State.
Can I form an LLC for a non-profit organization in New York?
Yes, you can form a non-profit LLC in New York by filing the appropriate forms with the New York State Department of State and receiving the 501(c)(3) notice of determination status from IRS.
Can I register my LLC outside of New York, but still conduct business in New York?
Yes, you can register your LLC elsewhere as a foreign LLC and choose New York as your registration state; submit the application as a foreign entity.
Which state agency is responsible for maintaining LLCs in New York?
The Department of State is responsible for maintaining LLCs in New York and offers online name searching, wide-area name reservation, and report filing services.
What is the LLC publication requirement in New York, and is it mandatory?
LLC publication requires New York LLCs to publish legal notices in selected newspapers near their respective county of establishment. In general, failure to conform to the publications may negatively affect your New York LLC status.
Does New York allow virtual offices for LLCs?
Yes, New York allows virtual office addresses or a registered agent as alternatives, ensuring efficient operations for those who work remotely without geographic constraint.
Does LLC liability protection extend to non-resident owners of New York LLCs?
Yes, liability protection extends to all members irrespective of their residency in case of New York LLCs.
Can a foreign blockchain network use a New York LLC structure?
Yes, New York LLC incorporation allows for the issuance of licensed security tokens; see Section 3.C(i) of the New York CPA guidelines for further regulations.
Can my LLC agreement provision state NY-based advisors instead of using an ADR agency?
Yes, disputes settling processes aren’t statutory, which makes it subject to customizing your LLC operating agreement as per New York’s LLC law.
Can I operate as a professional service LLC (PLLC) in New York state?
Yes, under restrictive regulations explicitly encompassing qualified educational certifications and specific localized compliance requirements.

Also Read

How Fast Can I Form an LLC in New York

The timeline for forming an LLC in New York can vary depending on several factors. The state has specific requirements and procedures that need to be followed to ensure successful incorporation. However, despite these necessary steps, it is possible to establish an LLC relatively quickly if all the necessary information and paperwork are in order.

One of the first steps in forming an LLC in New York is choosing a name for the business. Ensuring that the chosen name is unique and compliant with state regulations is crucial to avoid any delays in the registration process. Conducting a thorough name search to check for availability can expedite this step, allowing for a faster approval and acceptance by the state.

Another important factor that can impact the speed of forming an LLC in New York is preparing and filing the necessary documents with the state. This includes drafting the articles of organization, outlining key details about the business such as its name, address, ownership structure, and purpose. Ensuring that the information provided is accurate and complete can help streamline the registration process and avoid unnecessary delays.

Once all the required documents are prepared, they must be submitted to the New York Department of State. The state offers online filing options, which can significantly expedite the process compared to traditional paper filing methods. The online portal provides a convenient and efficient way for business owners to submit their registration documents and receive confirmation of approval within a shorter timeframe.

In addition to filing the necessary paperwork, paying the required fees is another essential step in forming an LLC in New York. The state imposes various fees for registration, publication, and other administrative purposes, all of which must be paid promptly to finalize the incorporation process. Ensuring that all fees are paid on time can help avoid any delays and ensure a smooth and expeditious registration process.

Overall, forming an LLC in New York can be a relatively fast and straightforward process if business owners are proactive and diligent in meeting all state requirements. By conducting thorough research, preparing accurate documentation, and utilizing online filing options, entrepreneurs can establish their LLC efficiently and start their business operations in a timely manner.

In conclusion, while the process of forming an LLC in New York may require careful attention to detail and compliance with state regulations, it is possible to complete the registration process quickly and efficiently with the right approach and preparation. By following the necessary steps and utilizing available resources, business owners can establish their LLC and begin pursuing their entrepreneurial endeavors without unnecessary delays.

Conclusion

In conclusion, starting an LLC in New York is a strategic choice for entrepreneurs seeking a flexible, straightforward business structure with limited liability protection. By following the essential steps, including choosing a business name, filing Articles of Organization, appointing a Resident Agent, creating an Operating Agreement, obtaining an EIN, and securing the necessary licenses and permits, you can successfully establish your LLC. This business structure offers numerous advantages, such as pass-through taxation and ownership flexibility, making it an attractive option for small business owners looking to grow and protect their ventures. As always, consult legal and business professionals for guidance specific to your situation and state requirements.

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