How to Start an LLC in New York: 7 Steps
From upstate New York to downtown Manhattan, the Empire State is a great place to start a business. In this article, we’ll tell you how to start an LLC in NY to help make your business dreams come true.
How to Form an LLC: Step-by-Step Guide
Forming an LLC comes down to following a few simple steps, which our expert team details below.
1. Choose an LLC Business Name
In order to form your LLC in New York, you’ll need to choose a name. Your name must include the words “limited liability company,” “LLC,” or “L.L.C.” In addition, the state has several naming guidelines you need to follow to make your business name legitimate, with restrictions on certain words and phrases you’re not allowed to use.
When thinking about how to get an LLC in NY, it’s a good idea to check the availability of the name you select. After all, your LLC’s name is the foundation of your business, and you want it to be unique. Another option for checking name availability is to do a basic internet search, as well as checking the U.S. Patent and Trademark Office database.
If you have a great name, you may want to think about reserving it. This will allow you to place your name on hold if you’re not quite ready to file your paperwork. All you need to do is submit the Application for Reservation of Name form and pay $20 to the New York Department of State. Once filed, you’ll receive a certificate of reservation, and your preferred LLC name will be on hold for 60 days.
Finally, when contemplating how to start an LLC in NY, consider whether your business will ever change or expand its focus. If so, you might consider a DBA (doing business as) name for your LLC. A DBA, also known as an assumed or fictitious name, allows you to use a pseudonym while keeping the same business structure. You’ll need to file a Certificate of Assumed Name form and pay a $25 fee.
2. Name a Registered Agent
Starting an LLC in NY requires naming the NY Secretary of State as the default registered agent, instead of a person, for your business.
The registered agent accepts all legal documents and other important papers (tax information, state guidelines for businesses) on behalf of the LLC. In New York, the Secretary of State will receive these documents.
You may also want to select a backup registered agent of your choice. You may choose a person (as long as they are 18 and have a NY street address) or a registered agent service. The best LLC service for a registered agent will cost between $50 to $300 per year.
3. File Articles of Organization
One of the most critical steps when learning how to start an LLC in NY is submitting the articles of organization, which make your LLC a legal business entity.
To form your LLC in New York, you’ll need the following information:
- Name of LLC (you’ll list the name several times on the filing paperwork so make sure it matches)
- The New York county where the LLC’s office is located (a list of counties can be found on the NY State website)
- The name and street address where the NY Secretary of State should send documents
- The signature of the person organizing the LLC
- The signature and address of the person filing the articles
Remember to be careful when listing the county on your paperwork. For instance, if you’re wondering how to get an LLC in Syracuse, NY, you will need to list Onondaga County.
For an LLC in New York, the cost for filing is $200. You can file the articles by mail, in person, by fax, or online. With so many filing options, you might wonder, How long does it take to form an LLC in NY? If you file by mail, it may take a few weeks to get your LLC formed. If you need your business up and running in a hurry, you can either pay an expedited fee or file your articles online. The online filing instructions are on the Secretary of State website.
Foreign LLCs
You may be wondering how to form an LLC in NY if your business is based in another state. For example, if your LLC was formed in North Carolina, but you want to conduct business in New York, you will need to register your company as a foreign LLC. In this instance, “foreign” simply means out of state, not out of country.
If you’ve already formed an LLC out of state, you won’t need to know how to start an LLC in NY. However, you’ll need to use a registered agent located in NY in order to do business in the state. You also need to file an Application for Authority, a Certificate of Existence from your LLC’s home state, and pay $250. You can find out more information on the NY Department of State website.
4. Follow New York LLC Publication Requirement
A New York law requires that you meet a publication requirement within 120 days of the articles of organization becoming effective. The articles of organization must be published in two newspapers designated by the county clerk in the county where the LLC is located, and must run in each paper for six consecutive weeks to alert the public of the LLC’s formation.
Once the notices have run, each newspaper will provide you with an affidavit of publication. Then, you’ll need to submit these affidavits, along with a Certificate of Publication and a $50 filing fee to the NY Department of State.
5. Create an Operating Agreement
When you’re thinking about how to start an LLC in NY, you’ll need to consider the management of your company. That’s why NY requires all LLCs to create a written operating agreement before, at the time of, or within 90 days of filing the articles of organization.
You won’t have to file the operating agreement, but it’s an important document that will lay out each member’s duties and responsibilities to the business. It can also help limit conflict and settle arguments over business dealings. You will need to keep a copy of the operating agreement as well as any amendments.
Anything not covered in your operating agreement will default to NY state law. Therefore, your agreement should at least cover:
- Members’ names and addresses
- Voting rights and decision-making powers of each member
- Duties and obligations of each member
- Member liabilities
- Contributions
- Profits, losses, and distribution
- Transferring membership interest
- Dissolution
LLC in New York Management Style
When determining how to start an LLC in New York, one question relates to management style. You can either have a manager-managed or member-managed structure. Your LLC will be member-managed by default unless you select a different management structure.
The difference between the two is simple:
- Member-managed. The members listed in the articles of organization jointly run the company’s operations and can make ordinary business decisions
- Manager-managed. The members will appoint one or more managers to handle the day-to-day operations of the LLC and vote on extraordinary business decisions (dissolving, adding a member)
6. Obtain EIN
Discussing taxes is never fun, but it’s a necessary part of your business. Don’t worry if you feel like you don’t know where to start or how. To start an LLC in NY, it will require getting an EIN (employee identification number).
Your EIN will allow you to hire employees, open a business bank account and file state and federal taxes. You can apply for an EIN for free on the IRS website.
7. Maintain LLC Status
Now that you’ve read about how to start an LLC in NY, you need to know how to maintain its status. One task you’ll need to complete every year is pay taxes for your business. As a pass-through entity, your LLC will need to pay federal income tax through the owner.
The amount of taxes you pay depends on your LLC’s profits. You’ll also need to file an annual filing fee with the NY Department of State. Fees range from $25 to $4,500 and depend on the LLC’s gross income.
You’ll also need to file a biennial statement every two years for $9. This allows the NY Secretary of State to stay up to date on your LLC’s business address for sending legal correspondence.
Frequently Asked Questions
How much does it cost to form an LLC in New York?
It costs $200 to file your articles of organization and $50 for the publication fee.
What is the difference between an LLC vs. S-Corp?
An S-Corp, or corporation, is a type of tax classification from which an LLC can benefit. You can elect to have your LLC taxed as an S-Corp and use pass-through taxation to avoid being taxed at a higher rate like a corporation. However, you should note that in NY, an S-Corp is taxed like a regular corporation at 8.85%.
Do all LLCs in NY require an operating agreement?
Yes, under state law Section 417, a written operating agreement is required. This includes single-member LLCs where an operating agreement can help prove that you own your LLC and protect you from business liabilities.
How do I dissolve my LLC?
If you’re wondering how to start an LLC in NY, you may also need to think about how to dissolve one. If you need to end your LLC, you will need to file an Articles of Dissolution with the NY Department of State. The filing fee is $60.
Ready to Start Your LLC? New York Is Waiting.
Starting a business requires business acumen, finances, and determination. If you’re ready for the challenge and want professional help in learning how to start an LLC in NY, consider discussing your plans with an expert. The best LLC services are a great place to start!
Legal Disclaimer: This article contains general legal information but does not constitute professional legal advice for your particular situation and should not be interpreted as creating an attorney-client relationship. If you have legal questions, you should seek the advice of an attorney licensed in your jurisdiction.
