New York has a diverse economy and is arguably the financial center of the world. With enterprises that range from fashion to banking and from real estate to baking, it’s no wonder that so many people start small businesses in New York. If you’re considering becoming a business owner, you may want to learn how to start an LLC in NY.
Many business owners have questions about forming an LLC in New York. An experienced business law attorney can help you navigate the process for your particular business; there are special licensing and permitting regulations for certain entities, such as those that serve liquor, banks and credit unions, or law firms.
This guide from Lawyer for Business covers everything you need to know about forming an LLC, including filing the Articles of Organization, fulfilling New York business requirements, and creating a viable business plan. The process can be simpler with advice from an experienced LLC lawyer.
1. Choose a Name for Your New York LLC
The first step in starting a limited liability company (LLC) in NY is naming your entity. Before you can register an LLC, it needs a name. However, you can’t just name your New York limited liability company anything you wish. New York has specific naming requirements for corporations that your new business must meet.
Follow the New York LLC Naming Guidelines
- The business name must include “Limited Liability Company,” "LLC," or "L.L.C.".
- The name must differ from existing businesses in the state.
- It cannot contain words that name a government agency, such as the Department of State, the FBI, or the IRS.
- Some restricted terms, such as "lawyer," "bank," or "credit union," require additional documentation or licensure.
If you’re unsure whether your business name exists, you can search the New York Secretary of State website to check name availability.
Check If the Name and URL Are Available
You should also consider acquiring a URL that matches your business name. You may not think you need a website at first, but it’s better to secure one now than to wait a few years and realize that you can't get a web address in the name of your business.
If you're not quite ready to open LLC in NY, you can still reserve the name of the LLC. There is a small fee involved, but it gives you up to 60 days to submit the paperwork for your company.
Decide Whether to Use a DBA
You may also wish to use a DBA, which stands for "doing business as". Your LLC name — the name you register your company as — may be more formal since you’ll be using it for contracts, writing checks, and other business matters. But you might wish your business to have a more memorable, catchier moniker, like “Paws ‘n Spas”. Or suppose that your LLC name is fairly generic, but you want your business name to be distinctive. Or you might want certain branches of your business to be more specific, such as a food truck company that operates a taco truck and a burger truck.
2. Choose a Registered Agent in New York
New York businesses require an agent for service of process — an entity that accepts legal documents on behalf of the business. For example, if your business is sued, legal documents relating to the lawsuit will be delivered to its registered agent. All LLCs registered in New York must provide the name and address of their registered agents to the New York Department of State.
The registered agent for your LLC can be a person or other entity who is authorized to receive legal documents and other notices on behalf of the limited liability company. The registered agent has to meet several requirements:
- Can provide registered agent services.
- Has a physical address in New York.
- Is available to accept legal documents during normal business hours.
What Is a Registered Agent for LLCs, and Do I Need One?
The registered agent accepts service of process. However, you may not need a dedicated registered agent for a New York LLC. The Secretary of State can provide these services for registered LLCs and will forward any legal documents to the business address you provided.
If you choose your own registered agent, you need to list its name and address on the LLC’s Articles of Organization.
3. Prepare and File Articles of Organization in New York
Articles of Organization are necessary to establish your LLC. These articles state basic information about your business and are the formal documentation that opens your new entity. You can use Form DOS-1336 to file the Articles of Organization with the New York State Division of Corporations. This form is fairly straightforward and can be filed either online or via mail, with a NY LLC filing fee of $200 and a cashier’s check payable to the New York Department of State.
The articles should include the following:
- The LLC name
- The county in which it’s located
- A New York address for the Secretary of State to send legal documents to
- The signature of the LLC’s organizer and the name and address of the person forming the LLC
After you file this form, the NY Secretary of State reviews it, and if it’s approved, your LLC officially becomes a New York business entity. The LLC approval time can be anywhere from six to twelve weeks if filed by paper, and as little as 24 hours if filed online.
You can file online by creating an account at ny.gov and monitoring your application status. You will need the completed Form DOS-1336 and the application fee of $200.
File by Mail
Alternatively, you can print out Form DOS-1336, fill it out, and mail it along with the $200 application fee to:
Department of State Division of Corporations
State Records and Uniform Commercial Code
One Commerce Plaza
99 Washington Ave.
Albany, NY 12231
4. Publish Your Articles of Organization in Two Newspapers
New York also has a publication requirement for newly formed LLCs. LLC owners must publish a notice about its formation or a copy of its Articles of Organization in approved newspapers. This must be done within 120 days of the approval of the LLC’s Articles of Organization. The county clerk of the county where you’re registering the LLC will have a list of designated newspapers to run the notice in. The notice must be published for six consecutive weeks in two newspapers, one daily and the other weekly.
Once the notice’s run is complete, the publisher of each newspaper will provide your LLC with an Affidavit of Publication, which you must then use to file for a Certificate of Publication. This form requires affidavits from the newspapers and a filing fee of $50.
Bear in mind that publication fees can vary widely across the state; each newspaper publisher sets its own. Smaller papers with lower circulation and those in more rural areas may be less expensive than larger publications in bigger metro areas. Thus, you might decide to choose a registered agent located in a county with cheaper options for publication.
What Is New York's LLC Publication Requirement?
All New York LLCs must publish a Notice of Formation in at least two designated newspapers for six consecutive weeks.
Can I Choose Any Newspaper?
You may choose any designated newspaper in the county your registered agent service is located in.
What Is a Certificate of Publication and What Do I Do with It?
The Certification of Publication is a form required by the New York Department of State.
5. Prepare a New York LLC Operating Agreement
Think of your LLC’s Operating Agreement as its constitution — the document that governs the operation of the company. It’s an internal document you use for general business operations, and it outlines the structure and other pertinent rules about how your business will be run. New York City requires all LLC members to establish an Operating Agreement within 90 days of filing Articles of Organization.
You do not need to file the Operating Agreement with any state or federal agency. Just keep it with your other business records. There isn’t a limit to what you can put in the Operating Agreement, but it generally includes the duties and responsibilities of the owners and partners, along with guidelines for how the profits and losses are allocated between the corporate partners.
Why Is an Operating Agreement Important?
Aside from being a legal requirement in New York, you may want to build certain provisions for buying out partnerships into the Operating Agreement or stipulate a process for settling disputes. An experienced business law attorney can help you construct a legally binding Organization Agreement that protects the interests of all partners and provides personal liability protection for the members in case legal action is brought against the company.
6. Receive a Certificate from the State
New York state issues a formal certificate to confirm that the LLC exists as a business entity once the formation documents have been submitted and approved. It can take up to seven weeks to receive the certificate unless an expedited request is submitted electronically or via fax, which can shorten the turnaround time to as little as 24 hours.
You need this certificate to do business as an LLC, such as opening a business bank account, applying for relevant business licenses, and obtaining a federal Employer Identification Number (EIN).
7. Get a Federal Employer Identification Number (EIN)
After the New York Department of State approves your LLC and issues the formal LLC certificate, the next step is to apply for a New York Employer Identification Number (EIN). The EIN is the identification number that the Internal Revenue Service uses for business taxes and other income reporting, such as employee tax withholdings.
Don’t file for the EIN until after your LLC has been approved; otherwise, you will have an EIN that is connected to an entity that doesn’t exist!
Besides using the EIN for taxes, you also need it for business banking and for registering for certain business licenses and permits.
There is no cost for applying for an EIN. You can fill out a form on the IRS website, via fax, or by mail.
8. Open a Bank Account for Your New York LLC
An LLC provides protection from personal liability for the owners and partners in case of legal action against the company. However, LLC protection is only extended to the company if there is a complete separation between the business assets and the assets of the partners or owners. This means that you will need a business bank account for the LLC.
Many New York banks and credit unions offer special perks for a new business bank account, so you may want to look locally before exploring account options from national banks.
9. Comply with New York Tax and Regulatory Requirements
Depending on the nature of your business, your LLC may require additional regulatory or tax requirements:
- Obtaining its own EIN with the IRS, if the business has more than one employee or member.
- Acquiring certain business licenses and permits, such as a local business license.
- Acquiring operating permits, like a liquor license or food handling permit.
Certain businesses require additional licenses. For example, a bar or restaurant may wish to obtain a liquor license. Liquor licenses may be difficult to come by in New York. If you’re having trouble obtaining one for operation, a liquor license attorney in New York may be able to help.
Some certifications are not a requirement but may be beneficial to your business. For example, a minority- or woman-owned business may wish to obtain MWBE certification. An MWBE attorney in New York can help you obtain your MWBE-certified status.
Each New York LLC that is considered a partnership or disregarded entity that derives any income, loss, or gains from New York sources must pay an annual filing fee. However, if your LLC will be treated as a corporation for federal tax purposes, you will not have to pay the filing fee.
This fee is paid to the Department of Taxation and Finance and requires submission of Form IT-204-LL, Partnership, Limited Liability Company, and Limited Liability Partnership Filing Fee Payment Form. The form may be found online at the New York State Department of Taxation and Finance website, and fees range from $25 to $4,500.
All New York LLCs must also file a New York LLC Biennial Statement every other year that it operates to maintain its active status as an LLC in the state. If you do not file this every two years, the state will administratively dissolve the LLC.
The filing fee is $9 every two years, and it is due by the end of the anniversary month of your LLC's founding. You can file the Biennial Statement and pay the fee online with the New York Department of State.
Starting an LLC in New York: The Bottom Line
Starting an LLC in NY can be tricky to navigate for business owners unfamiliar with New York laws about incorporating business entities. Lawyer for Business, a business law firm serving clients across New York State, can help.
We provide professional guidance for the LLC formation process and will file all appropriate paperwork on your behalf, and we can also act as a registered agent for your LLC. We can discuss options tailored to your business in your initial consultation, so call today to speak with one of our experienced LLC lawyers.
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