How Do I Start an LLC in New York?
here are the 8 steps to forming an LLC in NY. We explain each step below .
- Choose a name for your LLC.
- Find a NY registered agent.
- File articles of organization with NY state.
- Obtain NY business permits.
- Publish notice of LLC formation and submit certification of publication to the state.
- Create an LLC operating agreement.
- Keep your LLC active by paying necessary NY taxes.
- Comply with federal obligations, such as getting an employer identification number.
What Are the Benefits of an LLC in NY?
When you ’ re starting a business in NY, one important decision is choosing an entity structure. You may decide to form an LLC, or limited indebtedness company, if you want the chasteness of a lone proprietorship with the legal protections of a corporation. An LLC can besides protect you from legal exposure to the business ’ s debt and obligations, which is why many freelancers and startups prefer the LLC .
Creating an LLC in NY: Eligibility Requirements
You need to meet one of two qualifications to create an LLC in NY :
- You, the business owner, must be a New York State resident—or
- The business is located in NY state
The New York Department of State sets the eligibility requirements for LLCs in the state of New York. But there are besides industry, license and zone rules to follow, many of which are specific to your city or municipality .
- For example, starting a daycare, a food service establishment, or a home-based business all require special permits.
- In NYC, even temporary situations or one-time events, such as a grand opening in a public park or on a city block, require express permission from the city.
Research the rules for location-specific requirements and get the necessary licenses and permits so you can legally start your LLC in NY. For guidance on legal obligations, consult the business resources your city offers. In NYC, you can use the bit-by-bit on-line business ace to determine precisely how to start a business in the city .
How to Create an LLC in NY: 8 Steps
once you ’ ve determined that you ’ re eligible to form an LLC in NY and you ’ ve sorted through the license or license requirements, you ’ ll be quick to create your LLC .
Step 1: Choose a Name for Your LLC
The name of your LLC has to meet sealed state guidelines. Choose a name that makes feel for your business .
- You can do business under the name of your LLC.
- Some business entity types require a DBA or “doing business as” name, but you will not need this when you’re creating an LLC in NY. In fact, if you do decide that you’d like to operate under a name that’s different from your legal name, you’ll need to file a Certificate of Assumed Name with the NY Department of State.
In NY express, your LLC name needs to meet these guidelines :
- Must contain the words “ LLC, ” “ L.L.C., ” or “ Limited Liability Company. ”
- mustiness not incorporate these restricted words or phrases ( these words, like “ repair, ” “ college, ” and “ bank ” are largely set aside for certain sectors, professions, or industries with pre-designations ) .
- must be singular from the names of other LLCs in New York .
This last requirement is possibly the most unmanageable to follow. To check whether an LLC name is available, review the NY express Corporation and Business Entity Database, Yelp listings and the chicken pages. however, the only way to confirm the handiness of an LLC name is to submit a written request to the Department of State. You ’ ll have to pay a $ 5 fee for each name you ’ d like them to inquiry, but the state can confirm whether your chosen name is available. You can then reserve it for up to 60 days by paying a $ 20 name mental reservation fee .
Step 2: Provide an Address for Receiving Official Mail
The New York Secretary of State automatically serves as the file agent for New York LLCs. The register agent accepts official mail and service of process on your clientele ’ s behalf, and it forwards those documents to you .
In your articles of administration, you ’ ll want to specify where you ’ d like those documents sent ( typically your business ’ randomness principal address in New York ) .
- You can choose your business lawyer or another individual to act as an extra register agent .
- You can besides opt for an on-line legal service like IncFile or LegalZoom ( either of which can besides help with creating an LLC in NY ) .
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Step 3: File Your Articles of Organization
Next you ’ ll need to create and file your LLCs articles of arrangement. Your articles of administration document establishes your LLC as a separate legal entity. It includes basic information about your LLC, including the name of the business, the county it ’ south in, your register agent ’ sulfur appoint and address, and the file clerk ’ mho name and address. The filer can be you, another business owner or even person from outside the business .
In your articles of constitution, you ’ ll necessitate to indicate whether you ’ re starting a member-managed LLC or a manager-managed LLC .
- In a member-managed LLC, all owners participate in the business’s day-to-day decisions.
- In a manager-managed LLC, owners select one or more managers to make daily decisions. If you have a single-member LLC in NY—like, if you’re a freelancer creating an LLC in NY—you won’t have to worry about this distinction.
You can use the fillable two-page document from the Department of State to complete the articles of arrangement, or you can download and complete it by bridge player ( function black ink and clean white newspaper so the State ’ s recording engineering will accept it ). Be sure your LLC ’ randomness name is precisely the same in all the compulsory places .
careless of how you file your articles of organization, you ’ ll need to pay the erstwhile nonrefundable file fee, which is presently $ 200. If you file on-line, you ’ ll receive your acknowledge and citation via electronic mail .
Step 4: Obtain NY Business Permits
Every state and vicinity has unlike requirements for operate businesses. In New York, over 30 professions require a license from the express. Examples include barbers, security system guards, healthcare professionals, home inspectors and real estate brokers. If your business is in a highly regulated industry, such as food service or childcare, you ’ ll likely need a particular license to operate. New York State ’ randomness Business Express Wizard can help identify the license regulations for your clientele. You can besides contact your city, borough or county license representation to learn more .
Step 5: Publish Notice of LLC Formation
NY state law requires you to publish a copy of your articles of arrangement or a notice of your LLC formation in two newspapers ( one daily and one weekly ) for six consecutive weeks within 120 days of your LLC formation .
- You have to publish your notice in newspapers approved by the NY county where your LLC is located. To find out which newspapers are acceptable, contact your county clerk.
- If you choose to publish a notice instead of your articles of organization, be sure the LLC name in the notice matches the Department of State’s records as set forth in your initial articles of organization.
- To get your notice published, contact the newspapers yourself or hire a third-party service to handle it for you.
- The newspapers will provide you with an affidavit of publication—they’ll also charge a publication fee. NYC-based business may have to pay several thousand dollars due to steep publishing rates for NYC newspapers. To save money, you might choose a registered agent outside NYC so you can use that address as your LLC’s office address. That way you could run your publication notice in a newspaper in that county, which likely has lower publishing rates.
once you ’ ve fulfilled the issue prerequisite, you ’ ll need to submit a Certificate of Publication, along with a $ 50 filing fee, to the New York Department of State .
If you fail to complete this requirement and submit the Certificate of Publication within the 120-day timeframe, the NY State Department will suspend your LLC ’ s ability to lead business .
Step 6: Create an LLC Operating Agreement
According to the NY Department of State, the members of an LLC have to to adopt a written Operating Agreement before, at the time of, or within 90 days after filing your articles of constitution .
Although you don ’ t need to file your LLC operating agreement with NY submit and—as the State Department admits—the law doesn ’ t bespeak consequences for not adopting an operational agreement, you ’ ll silent want to create one to form the backbone of your business. [ 1 ]
by and large, an operate agreement includes the following :
- Basic company information: legal name of the LLC, address, registered agent.
- Business purpose.
- Duration of the business.
- Tax treatment.
- Member and manager information.
- Member contributions including rights and responsibilities.
- Member meetings.
- Voting and approval rights.
- Member compensation.
- New members and exit rights.
- Rules for company dissolution.
To create this document, you might use an on-line legal military service or influence with a business lawyer .
Step 7: Keep Your LLC Active
To start running your LLC, consider the following adjacent steps :
There a few obligations to manage to keep your LLC run. First, you ’ ll need to pay occupation taxes. LLCs are taxed as pass-through entities, meaning the responsibility for paying federal income taxes falls on the LLC owners .
NY state besides assesses an annual file tip on most single-member and multi-member LLCs. [ 2 ] The fee ranges from $ 25 to $ 4,500 depending on your LLC ’ south income. If your LLC has employees, you ’ ll besides need to pay union and submit use taxes. If you sell goods to customers, you ’ ll have to collect and remit sales taxes .
LLCs in NY besides have to update their contact information every two years with the New York Department of State. This biennial argument has a $ 9 filing fee .
Step 8: Comply With Federal Requirements, Such as Obtaining an Employer Identification Number
You may need to obtain a federal tax ID, besides called an employer recognition number ( EIN ). You ’ ll use your LLC ’ second EIN when filing your business taxes—sometimes, an EIN is besides necessary when opening a business savings bank account or applying for clientele loans. If you ’ re starting an LLC in NY with employees, you ’ re required to get an EIN and register with the NY Department of Labor .
typically, all occupation owners should get an EIN ; the only LLCs that don ’ thyroxine legally require a federal EIN are single-member LLCs with no employees and no excise tax duties. All other LLCs, though, do need to apply for an EIN with the IRS, which can be done on-line or by mail .
When you receive your LLCs EIN, you can decide to keep your tax condition as an LLC, meaning you ’ re subject to pass-through taxation, like a partnership, or if you ’ vitamin d prefer to have your LLC taxed as a pot. There are benefits with either option, sol ultimately you have to determine what will work better for your business. If you decide to change your condition, arrant and file mannequin 8832 with the IRS.
»MORE: 21 Small-Business Tax Deductions You Need to Know
The Bottom Line
Don ’ metric ton let the setup procedure deter you from taking this critical step for your business. By creating an LLC in NY, you ’ ll take the beginning jump into the world of entrepreneurship. Plus, remember that you don ’ t have to complete this process on your own. You can always consult an lawyer or on-line legal servicing for aid .
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