Starting an LLC in New York requires several steps, including choosing a name, selecting members and managers, filing articles of organization with the state, and obtaining any necessary licenses and permits.
Starting LLC In New York
Choose a Name
The first step in starting an LLC in New York is to choose a unique name for your business. The name must be distinguishable from any other business name already on file with the state and must include the phrase “Limited Liability Company” or one of its abbreviations (LLC or L.L.C.).
Select Members and Managers
An LLC must have at least one member, but there is no maximum number. The members of an LLC are the owners of the company and are responsible for making important business decisions. Managers, on the other hand, are responsible for managing the day-to-day operations of the LLC. In New York, an LLC can be managed by one or more members or by one or more managers who are not members.
File Articles of Organization
Once you have chosen a name and selected members and managers, the next step is to file articles of organization with the New York Department of State. The articles of organization must include information about the LLC’s name, address, members and managers, and the purpose of the business.
Obtain Necessary Licenses and Permits
Depending on the nature of your business, you may need to obtain various licenses and permits in order to operate legally in New York. For example, businesses that sell goods or services may need to obtain a sales tax permit, while businesses that provide certain types of services may need to obtain a professional license.
Obtain an EIN
An Employer Identification Number (EIN) is a federal tax identification number that is required for all LLCs that have more than one member. You can obtain an EIN by filling out an application on the IRS website.
Register with the Department of Taxation and Finance
LLCs that do business in New York State are required to register with the Department of Taxation and Finance and obtain a certificate of authority. This certificate is required in order to legally do business in the state and to collect and remit sales tax.
Prepare an Operating Agreement
An operating agreement is a legal document that outlines the rights and responsibilities of the members of an LLC. It is not required by the state of New York, but it is highly recommended. The operating agreement should include information about the management of the LLC, the distribution of profits and losses, and the procedures for admitting new members and dissolving the LLC.
File annual reports
LLCs are required to file annual reports with the Department of State each year. The annual report must be filed by the last day of the anniversary month of the LLC’s formation.
Starting an LLC in New York requires choosing a unique name, selecting members and managers, filing articles of organization with the state, obtaining any necessary licenses and permits, obtaining an EIN, registering with the Department of Taxation and Finance, preparing an operating agreement, and filing annual reports. It is important to consult with a lawyer or professional to ensure that all necessary steps are taken and that the business is in compliance with all state and federal laws.
Also Read: PROS AND CONS OF RUNNING AN LLC IN NEW YORK
How Much Does It Cost To Form An LLC In New York?
The fee for filing the Articles of Organization is $200. The fee may be paid by cash, check, money order, MasterCard, Visa or American Express. Checks and money orders should be made payable to the “Department of State.” Do not send cash through the mail. To pay the filing fee using a credit/debit card complete and sign the Credit Card/Debit Card Authorization Form (pdf). Expedited Handling Services and certified copies are available for an additional fee.
Filing the Articles of Organization
- By mail, send the completed Articles of Organization with the filing fee of $200 to the New York State Department of State, Division of Corporations, State Records and Uniform Commercial Code, One Commerce Plaza, 99 Washington Avenue, Albany, New York 12231.
- In person, deliver the Articles of Organization to the above address. The Division of Corporations, State Records and Uniform Commercial Code is on the 6th floor and is open from 9:00 a.m. to 4:30 p.m., Monday through Friday.
- By fax, you may fax the Articles of Organization along with a Credit Card/Debit Card Authorization Form to the Division of Corporations, State Records and Uniform Commercial Code at (518) 474-1418.
- Online filing
How Long Does It Take To Get An LLC In NY?
The process of forming an LLC in New York typically takes around 2-4 weeks, but it can take longer if there are any complications or errors with the paperwork. The time frame for approval can vary depending on the workload of the New York Department of State and the completeness of the information and documentation provided. Additionally, you can expedite the process by filing online and paying an additional fee.
Do I Need A Lawyer When Forming LLC In New York?
You are not required to have a lawyer when forming an LLC in New York, but it can be beneficial to have one help you with the process. An attorney can help you understand the legal requirements for forming an LLC in your state, ensure that your paperwork is properly filed, and advise you on any potential legal issues that may arise. Additionally, a lawyer can help you navigate any complexities that may arise during the formation process, such as drafting an operating agreement or handling any legal disputes that may arise in the future. It ultimately depend on your situation, budget and familiarity with the process.
Benefits Of Forming LLC In New York
There are several benefits to forming an LLC in New York:
Liability Protection
An LLC provides personal asset protection to its members, meaning that the company’s creditors cannot go after the personal assets of the members in case the company is unable to pay its debts.
Tax Advantages
An LLC is considered a pass-through entity for tax purposes, meaning that the company’s profits and losses are passed through to the members and reported on their personal tax returns. This can result in significant tax savings for the members.
Flexibility
LLCs have more flexibility in management and ownership than other types of business structures.
Credibility
Forming an LLC gives your business a sense of credibility and professionalism. It makes it clear that you take your business seriously and are committed to it.
Separation of Business and Personal Finances
An LLC is a separate legal entity from its owners, meaning that the company’s financial transactions are separate from the personal transactions of the members.
Easier to Raise Capital
LLCs can raise capital by selling interests in the company, which can be more flexible than seeking a loan.
Potential for Long-term Growth
An LLC is a scalable business structure that can adapt to the changing needs of the company and its owners.
