Forming an LLC in New York
New York is one of the few states that has an aggressive economy and a pro-business environment. The state has just the right business, transportation, and logistics infrastructure to support small businesses as well as larger companies. If you are planning to start an LLC in New York then there are several processes involved in the registration and operation areas of the business. We have explained each relevant process in a step-by-step manner.
1. Choose New York LLC name
In order to start a New York limited liability company, one of the first steps is identifying a name for your business. A business name is like the identity of your company and all your marketing plans, customer or client initiatives, brand promotion activities, and new business formation will revolve around this name. There are certain LLC naming guidelines that you are required to follow along with New York LLC name search. The guidelines are:
- The chosen name should contain “limited liability company” or abbreviations like L.L.C or LLC pursuant to NY LLC L § 204 (2018).
- The business name should be distinguishable from the names of any domestic LLC, any authorized foreign LLC, and fictitious name or DBA of an authorized foreign limited liability company.
- The chosen name should also be distinguishable from the names of any domestic business corporation or not-for-profit Corporation as well as any other form of New York domestic corporations.
- The business name should not consist of any word, phrase, or abbreviation that is restricted or prohibited by any other New York statute.
Once you have created a business name that meets with the state statutes, you will need to conduct a New York LLC name search for business name availability. If the chosen name is available in the state database then you can file the Application for Reservation of Name with the Department of State, Division of Corporations. The name can be reserved for a period of 60 days and this process will enable you to form a New York LLC online.
2. Choose New York LLC registered agent
In order to start an LLC in New York, it is mandatory to designate and continuously maintain a registered agent in the state pursuant to NY LLC L § 302 (2018). IncParadise can be your New York LLC registered agent. As we are qualified and have the experience of handling service of process as required by state statutes, we can assist you with the process of registering your new business as well as fulfilling various business-related annual requirements as required by the state statutes. This has to be completed while ensuring your business is in compliance with all requirements of the Department of State. As a new business owner, you might not be familiar with the state laws or the documentation and paperwork required and this is where a New York LLC registered agent like IncParadise can provide the necessary assistance.
3. File Articles of Organization with the New York Department of State
Once you have thought of forming a limited liability company and have reserved your business name, the next step is to register a New York LLC. The formation of a limited liability company in New York is governed by the 2020 New York Laws, LLC – Limited Liability Company Law, Article 2 – Formation. In order to form an LLC, you will be required to file the Articles of Organization pursuant to NY LLC L § 203 (2020). The articles have to be submitted along with a filing fee of $200 and have to be mailed to the following address:
- Department of State
Division of Corporations,
State Records and Uniform Commercial Code,
One Commerce Plaza
99 Washington Ave.
Albany, NY 12231-0001
You can also file online through the online portal of Division of Corporations or alternatively, we at IncParadise can assist you with the process as this will minimize new business formation time. It is important to note that you will be required to fulfill NYC LLC publishing requirements and provide Affidavits of Publication pursuant to NY LLC L § 206 (2018) in order to ensure proper registration of your company.
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4. Follow New York LLC publishing requirements
When you register a New York LLC, it’s important to ascertain what other state-based requirements or additional filings you have to fulfill. These additional filings can vary from one state to another and in New York, there is a publication requirement to fulfill. So, what does this requirement entail? As a part of NYC LLC publishing requirements, the state requires a newly formed limited liability company to publish a notice of formation for a period of six consecutive weeks in two newspapers as specified by the County Clerk in the county where the legal address of your company is registered. The publishing requirements pursuant to NY LLC L § 206 (2018) are as follows:
- You need to publish in a newspaper that is circulated daily
- You need to publish in a newspaper that is circulated weekly
- The LLC publication should appear once a week in both daily and weekly newspaper
In order to comply with the NYC LLC publishing requirements, you will have to provide the following information:
- The name of the LLC
- The date of filing Articles of Organization to register a New York LLC
- The county where your LLC is located
- The business address of your company
- The purpose of the LLC
- The name of the New York LLC registered agent
5. Prepare New York LLC operating agreement
One of the important aspects to focus on before you start an LLC in New York is the operating agreement of a limited liability company. This is a type of official document, which outlines the various terms of an LLC in accordance with the specific needs of the owners. It also provides an insight into operational and financial decision-making in a structured way. The New York LLC operating agreement will be set in paper rules as well as expectations for the limited-liability company while ensuring credibility of the company as a legal entity. Depending on the type of LLC, you can create a single-member or multi-member LLC operating agreement.
Some of the key areas outlined in a New York LLC operating agreement are:
- Organizational information like ownership structure
- Management and voting whether it is member-managed or manager-managed entity
- Capital contributions or money invested by each member
- Distribution of profits and losses
- Changes to the membership structure
6. Obtain New York LLC EIN
An EIN is known as the Employer Identification Number or the Federal Employer Identification Number (FEIN). If you register a New York LLC then you may need to apply for and obtain an Employer Identification Number depending on the type of LLC. A single-member LLC without employees working like a sole-proprietorship may not require an EIN but an LLC with employees or a multi-member LLC will need an EIN. This is a unique 9 digit number that is assigned by the Internal Revenue Service (IRS) and is primarily used by businesses for tax reporting purposes. If you hire a New York LLC registered agent like IncParadise then we can help you obtain the Employer Identification Number (EIN).
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7. Obtain necessary business licenses and permits
Once you register a New York LLC, it becomes a legal entity but how do you make your business operational? This is where applying for and obtaining necessary business licenses and permits comes into effect. Every small business in New York doesn’t require a license and similarly, your business may require a single license or multiple licenses. The business license and permits in the state can be categorized as under:
- Industry-based – After you form a New York LLC online, you may search for licenses based on the industry your business is categorized under. Some of the industries that require licenses or permits include agriculture, business services, construction, education, finance, health, manufacturing, retail, and recreation among others.
- Local licenses or permits – This is a type of licensing or permit that is applied for and issued by the city or county your business is operating from. So, if you were to start a New York LLC in Suffolk County, NY then you will need to check with the Suffolk County Department of Labor, Licensing, & Consumer Affairs regarding licensing requirements of your business.
- Professional Licensing – Some businesses may require professional licensing especially for owners of such a company. If you want to start a Cosmetology clinic then you will need a professional Cosmetologist license offered through the Department of State.
You can find valuable business license information and resources with the New York State License Center, The New York State Department of State Division of Licensing Services, and the New York State Office of the Professions. Alternatively, a New York LLC registered agent like IncParadise can also provide guidance on business licenses required by your company in the state. You can also avail of our Business License Research Report for detailed information on permits and licenses in New York.
7. Open a bank account
One of the key requirements that are often overlooked when entrepreneurs start an LLC in New York is that of a business bank account. First-time business owners especially of a single- member LLC may feel that their personal account should be adequate for handling business transactions. The fact is that if you use your personal account for business transactions then you may not be able to report your taxes correctly and this will not be beneficial as a long-term arrangement. A business bank account on the contrary will help you to segregate personal finances from those of the company and ensure clean maintenance of your account books.
8. Comply with taxes and other regulations
Once you start an LLC in New York you may be required to pay some form of tax in the state. Taxes actually vary from one state to another and also according to the type of business entity and hence the taxes filed by a limited liability company may not be the same as that of a corporation. Some of the important taxes collected in the state of New York include the following:
- Corporation franchise tax
- State Employer Taxes
- Sales and Use Taxes
- Withholding tax