New York LLC
Limited liability companies (LLCs) are popular with entrepreneurs in New York because they offer a flexible way of structuring your business. Learn how to form and maintain an LLC in the state of New York.
$200
Formation fees
$10
Name reservation fees
$9
Biennial statement fees
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StartGlobal: Legal + Taxes + Bookkeeping for solopreneurs
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What is an LLC?
Limited Liability Company
LLC is a business entity in the U.S that provides limited liability to its members. It has characteristics from both corporation and sole proprietorship. LLCs are permitted under State statutes of each US state.
Limited liability
Personal assets are protected for people with limited liability when they are sued.
Corporation
A business entity that can issue shares and give limited liability to shareholders.
Members
Owners of an LLC are referred to as members. They own membership interest in the LLC.
Sole proprietorship
Where an individual engages in business activity without formal organization.
Types of LLC
Depends on the number of members and whether it has elected to change its IRS classification.
Single-member LLC
Has only a single member. IRS considers it as a sole proprietorship for tax purposes.
LLC as C-corp
Owners of an LLC are referred to as members. They own membership interest in the LLC.
Multi-member LLC
Has two members. IRS considers it as a partnership for tax purposes.
LLC as S-corp
A special election for a maximum of 100 US shareholders.
Actions
Here are some possible actions to take in a New York LLC. Click below to read in detail:
How to form an LLC in New York?
Follow these steps:
1. Name your LLC
Think of a list of names for your business that your customers would find appealing. Show it to your friends and some customers and get their feedback. If you already have a few names in mind, great.
To check if those names are available in the state of New York, go to the official entity search tool on the Secretary of State website. It’s free to search.
You can reserve a name with the state, by paying reservation fees. The reserved name will be expired after a specified duration. If you are filing Articles of Organization, you need not reserve a name separately.
Reservation fees
$200
Reservation duration
Instant
Every LLC needs to be identified with a designator. Shall contain without abbreviation the words "Limited Liability Company" or the abbreviation "L.L.C." or "LLC".
Make sure you follow LLC naming guidelines specified by New York state as per NY LLC §204. This includes not using names similar to existing companies, etc.
2. Get a mailing address
If you have an office or factory in New York, you can use that as your official company address. Note that this address will be made public. You can even use your home address as your official company address. But that may not give you privacy.
Alternatively, pick a virtual office address. This way, you pay a company for a street address and they handle all your mailing. You can then give this address to the state.
3. Hire a registered agent
Every New York LLC requires a registered agent in the state. If you are a resident of New York, you can be the registered agent for your LLC. However, your details will be made public and you must be available during all business hours to receive service of process.
Alternatively, there are companies that provide registered agent services for a fee. Pay for their service and you get to keep your privacy and ability to freely move around without worrying about compliance.
4. File Articles of Organization
Once you have a registered agent and an official office address, you can go ahead with filing your Articles of Organization. You can file it online on State of New York website.
Filing fees
$200
Processing time
Instant
Address
Department of State Division of Corporations
State Records and Uniform Commercial Code
One Commerce Plaza
99 Washington Ave.
Albany, NY 12231
5. Publish a notice in 2 approved local newspapers
Within 120 days of the LLC becoming effective, every LLC must publish a copy of the articles of organization or a notice related to the formation of the LLC in 2 approved newspapers in the county of the LLC's office. It must run for consecutive 6 weeks. One newspaper must be a daily newspaper and the other must be weekly.
Publish for
6 weeks
The notice must include almost all the information contained in the articles of organization.
After running the publication for 6 weeks, the LLC must fill out and file a Certificate of Publication and Affidavits of Publication with the Department of State.
Certificate of Publication filing fees
$50
Address
New York Department of State,
Division of Corporations,
One Commerce Plaza,
99 Washington Avenue,
Albany, NY 12231
6. Create an Operating Agreement
Operating agreements are mandatory in New York. Your LLC should be governed by the rules defined in the operating agreement. There are websites where you can customize operating agreements to your needs. Create and get it signed by your LLC members.
7. Get Employer Identification Number (EIN)
EIN is used by IRS to identify business entities. You create an EIN for free at IRS website.
8. Open a business bank account
It is important to separate your business and personal transactions. There are several ways to create business bank accounts. You can definitely open business checking accounts at traditional banks like Chase, Wells Fargo, etc. There are several other modern banking solutions that offer plenty of benefits to entrepreneurs.
Entity name
Every LLC should have a unique name in New York. New York maintains a list of names of entities in the state. Go through it to check if your chosen name is available.
Search for names
Go to the official website of the New York corporation & business entity database tool to see if the name you want is available.
Searching fee
Free
Reservation
You can reserve a name for your LLC for a specific duration by paying reservation fees to the New York division of corporations. You will have to file your LLC formation documents within this period to keep the name. Alternatively, you can directly go ahead with the LLC formation without any reservation. That's fine too.
Reservation fee
$40
Reservation period
60 days
LLC naming guidelines
The name you choose for your LLC must the official naming guidelines.
NY LLC §204
Visit
Here are some of the guidelines in simple language:
- 1
Shall contain without abbreviation the words "Limited Liability Company" or the abbreviation "L.L.C." or "LLC".
- 2
Don’t include terms that indicate that you are doing an activity that you are not authorised to do.
- 3
Your name should be ‘distinguishable’ in the Secretary of State records. Adding a punctuation or ‘the’ does not make it distinguishable.
- 4
Don’t use words that makes it seems like you are a governmental entity or has an affiliation.
Articles of Organization
In New York, Articles of Organization is the form you file with the Secretary of State to form an LLC. It contains the articles of formation for the LLC.
Filing Articles of Organization
There are a couple of ways to file
Address
Department of State Division of Corporations
State Records and Uniform Commercial Code
One Commerce Plaza
99 Washington Ave.
Albany, NY 12231
Online fee
$200
Online processing time
Instant
Mailing fee
$200
Mail processing time
3 - 5 days
LLC Biennial Statement
Every LLC has to file this report in New York to stay compliant with the state laws.
Filing Biennial Statement
New York LLC is expected to file this report biennially
File it online on New York Department of State website
Visit
Online fee
$9
Online processing time
same day
Failure to pay
Any biennial statement received after the due date will result in your LLC losing its “good standing” status with the state.
Agent for service of process
A agent for service of process is an agent of your LLC on whom any notice, process or demand may be served. Every LLC in New York needs to have a agent for service of process located in the state.
Requirements
According to Consolidated Laws of New york LLC L § 302:
- 1
Agent for service of process can be an individual or an authorised organisation.
- 2
Agent for service of process must have a street address where they can personally receive service of process.
- 3
Office of Agent for service of process cannot be just a mailbox service of a telephone answering service.
EIN
An Employer Identification Number, also known as Federal Tax Identification Number, is used to identify a business entity.
Who must have an EIN?
Single member LLC elected to be taxed as C-corp or S-corp
Single member LLC with an employee
All multi-member LLC
Operating agreement
Operating agreement is an internal business document that outlines the general rules and policies of the LLC.
Importance
It is not a legally mandatory document. However, it is recommended to have one since many courts, banks and financial institutions use it for verification. It is also nice to clearly outline the duties and relations between multiple members of an LLC—so you avoid any confusion in the future.
Format
There is no ‘required’ format for an operating agreement. You can include anything reasonable in it. In general, it has the following sections:
Basic Business information
Contains name, address, names and details of members, purpose
Member relationship
Contains membership interest, decision making process, powers, duties.
Membership transfer
Contains details on how to add or remove members and managers.
Accounting and tax
Contains details on how company records and distributions are maintained.
Dissolution
How to dissolve, wind up and terminate, due process to follow and exceptions.
LLC in New York
Similar to LLCs, there are other business entities that are considered by businesses in New York.
New York Business search
New York LLC add member
New York LLC remove member
Page sponsorWhy we like StartGlobal?
My genuine thoughts
Willy Justin
Founder, Statepedia
StartGlobal: Legal + Taxes + Bookkeeping for solopreneurs
Product
For small businesses, managing taxes, accounting and everything legal is just a pain. Nobody wants to do it, but they have to. Instead of working with CPAs, attorneys and others separately, Start brings all of them under a single subscription. It’s just smooth.
Team
I know the team behind StartGlobal very well. It’s a very hardworking group of individuals who are genuinely passionate about small businesses. They are backed by successful founders like Balaji Srinivasan, Biz Stone(Twitter) and others.
Price
Getting a CPA or attorney is a matter of thousands of dollars. It’s just unfair to pay so much when you’re a small business. Start has a single subscription that covers it all. It is a definite money saver.
$599 one-time