Our picks for LLC formation services

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ZenBusiness
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FAQs

How do I name my New York LLC?

Whether you set up a business in New York City or Albany, you must check name availability through the state website before you can register it. No two businesses can have the same name.

Is an operating agreement a must?

New York state law requires a small business to have an operating agreement, though it is not filed with state records.

How do I form an LLC in NY by myself?

Setting up a business in NY is fairly easy. With electronic filing, you can register your business online in a matter of minutes. To establish an LLC, you’ll file Articles of Organization with the New York State Department.

What taxes are New York LLCs subject to?

In New York, LLC owners pay both state and federal income tax. You’ll also collect sales tax on items you sell.

How does a sole proprietorship differ from an LLC in NY?

A sole proprietorship is not registered with the state, but an LLC is. A sole prop is easier to set up but doesn’t offer the limited liability protection that comes with a New York limited liability company.

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When starting a new company, choosing a business entity is the most important decision that the founders must make. For most businesses with more than one founding member, forming as an LLC is often the best option for a number of reasons. An LLC is an uncomplicated business structure that affords business owners legal protection by separating personal assets from business debts. Moreover, LLCs often enjoy a lower tax rate than corporations. Nevertheless, creating an LLC can get complicated depending on where you are based, with the formation process, filing fees, and continuing legal obligations differing from state to state.

The process of forming an LLC in New York State involves some unique elements rarely practiced in other states. For one, while in most states an LLC will appoint its own registered agent for service of process, in New York, the Department of State serves as the registered agent for every LLC in the state. The state also imposes additional requirements for an LLC: drafting an operating agreement, optional in most states, is obligatory in New York, as is the publication of a notice of organization in two local newspapers.

1. Select a name for your New York LLC

Follow naming requirements

There are 2 major guidelines to follow when naming your LLC in the State of New York:

  1. An LLC’s name must be distinguishable from the names of existing businesses on file with the New York Department of State Division of Corporations.
  2. An LLC’s name must contain one of the following phrases or abbreviations: “Limited Liability Company”, “LLC”, or  “L.L.C.”

Need help coming up with a business name? Check out our free business name generator.

Check the availability of your LLC name

After choosing a name for your LLC, confirm that it is available in New York with a search of the Department of State Corporation & Business Entity Database.

Reserve your LLC name with the Department of State

To prevent another business entity from using your LLC name before you legally organize in the state, it’s a wise idea to reserve the name with the New York Department of State Division of Corporations. File an Application for Reservation of Name by mail to reserve the name for up to 60 days. The filing fee for a name reservation is $20.

If the initial reservation period is not long enough, you can extend the reservation for two additional periods of 60 days by filing a Request for Extension and paying another $20 fee for each extension.

2. Provide a mailing address to the New York Department of State

In nearly every other U.S. state, an LLC must appoint its own registered agent service to handle its legal affairs. However, in New York, the Department of State automatically serves as every LLC’s registered agent, accepting legal papers on their behalf and forwarding them to the LLC’s office.

Therefore, an LLC must provide a mailing address to the Department so that any legal papers can be sent its way. Assigning an additional registered agent in the state is optional, but not required.

Our picks of the best registered agent services

  • Northwest Registered Agent: Starting a business requires a lot of state-mandated paperwork, which can be confusing for new business owners. Northwest offers business services that can help entrepreneurs find the right documentation, fill it out, and file it on time with the right government agency. In addition to helping you set up an LLC, Northwest has a host of additional services, like registered agent services, that new owners will find useful too.
  • ZenBusiness: There’s no need to stress about filing paperwork when you work with ZenBusiness. This company offers a great variety of LLC services, the focus of which is to ensure your business is set up correctly with the proper paperwork filled out and delivered to the right branch of your state government. Of course, ZenBusiness does charge for their services, but customers say they get the most bang for their buck.
  • Harbor Compliance is a great fit for organizations that register in multiple states and for those who don’t want to pay excessive service fees. With their network and electronic document delivery, they help ensure your business never misses a legal notification.

FAQs

How do I name my New York LLC?

Whether you set up a business in New York City or Albany, you must check name availability through the state website before you can register it. No two businesses can have the same name.

Is an operating agreement a must?

New York state law requires a small business to have an operating agreement, though it is not filed with state records.

How do I form an LLC in NY by myself?

Setting up a business in NY is fairly easy. With electronic filing, you can register your business online in a matter of minutes. To establish an LLC, you’ll file Articles of Organization with the New York State Department.

What taxes are New York LLCs subject to?

In New York, LLC owners pay both state and federal income tax. You’ll also collect sales tax on items you sell.

How does a sole proprietorship differ from an LLC in NY?

A sole proprietorship is not registered with the state, but an LLC is. A sole prop is easier to set up but doesn’t offer the limited liability protection that comes with a New York limited liability company.

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3. File Articles of Organization

To start your LLC in New York, you must file Articles of Organization with the New York Department of State Division of Corporations, as opposed to the New York Secretary of State.

The Articles of Organization must provide the following details:

  • LLC’s name
  • A New York address where legal documents should be mailed
  • New York county where the LLC is based
  • LLC organizer signature
  • Articles of Organization filer’s name and address

The filing can be completed online or through the mail. The filing fee is $200, which can be paid by check, cash, money order, or credit card

4. Publish a notice in local newspapers

An LLC is required to publish a copy of its Articles of Organization, or a notice announcing its formation, in two newspapers in the 120-day period following the LLC’s Articles of Organization becoming effective. This publication requirement typically costs $50. The newspapers will issue the LLC affidavits of publication, which must be filed with the New York Department of State along with a Certificate of Publication. The announcement must run for six consecutive weeks.

5. Create an operating agreement

Unlike in other states, New York law requires an LLC to write and adopt an operating agreement within 90 days of the filing of its Articles of Organization.

The operating agreement should do the following:

  1. Describe the LLC’s business structure
  2. Establish the individual responsibilities and obligations of LLC members
  3. Detail how the LLC will be run

Without an operating agreement clarifying the specific duties of its members, an LLC may face significant legal and operational difficulties.

6. Obtain an IRS Employer Identification Number (EIN) 

All newly formed LLCs in the United States must acquire an Employer Identification Number (EIN) from the Internal Revenue Service (with the exception of single-member LLCs). The nine-digit EIN is like a social security number for a business and is necessary to pay income tax, file tax returns, open business bank accounts, and perform many other important functions.

You can apply for an EIN online on the IRS website without paying a filing fee.

7. Fulfill your legal obligations

Once an LLC is registered, you have a few more things on your to-do list to accomplish. You should look into business licenses, be aware of upcoming report filings, set up a business bank account, and start marketing your business with a company website.

File a Biennial Statement

In New York, you must file a Biennial Statement. (Other states file an annual report). By filing the proper paperwork every other year, your business will remain in good standing with the state. New York LLCs must file their report by the end of their anniversary month. The biennial filing fee is $9, and the state doesn’t levy late fees against late payments, but if you don’t pay on time, your business won’t be in good standing.

Obtain business licenses and permits

Some New York LLCs may be required to obtain one or more state or local business licenses, permits, or certifications, depending on the nature of their business and their location.

  • Visit the New York Business Express website for more information on obtaining necessary state business licenses and permits.
  • Contact a local city or county clerk for guidance on satisfying local licensing requirements in your county or municipality.

Understand state taxes

Small businesses in New York face a complicated and costly tax code. NY LLC owners usually establish a pass-through entity, where business income is passed to personal taxes and taxed once. While LLCs aren’t subject to corporate taxes, they are required to pay filing fees, which are charged based on income. A minimum of $25 is charged for income less than $100,000.

NY tax rates: The personal state tax rates in NY range between 4-10.9%. The income that you generate from your business is quantified and added to any other income to compute your tax burden for the year.

File a BOI report

Congress recently passed the Corporate Transparency Act, which requires all businesses to file a Beneficial Ownership Report with the federal government. In an effort to minimize hidden income and shell companies, the report asks for the names of all owners and those with controlling interests in your organization.

Learn more about BOI reporting.

LegalZoom can help you file a compliant and stress-free BOI Report for only $149.

FAQs

How do I name my New York LLC?

Whether you set up a business in New York City or Albany, you must check name availability through the state website before you can register it. No two businesses can have the same name.

Is an operating agreement a must?

New York state law requires a small business to have an operating agreement, though it is not filed with state records.

How do I form an LLC in NY by myself?

Setting up a business in NY is fairly easy. With electronic filing, you can register your business online in a matter of minutes. To establish an LLC, you’ll file Articles of Organization with the New York State Department.

What taxes are New York LLCs subject to?

In New York, LLC owners pay both state and federal income tax. You’ll also collect sales tax on items you sell.

How does a sole proprietorship differ from an LLC in NY?

A sole proprietorship is not registered with the state, but an LLC is. A sole prop is easier to set up but doesn’t offer the limited liability protection that comes with a New York limited liability company.

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Post LLC tasks

Set up business bank accounts

Most business owners set up a business checking account to get started, but a business credit card could help you manage startup costs too. You should keep your business income and expenses separate from your own. Comingling your accounts can cause confusion.

Why you need separate accounts: As a business owner, you need to see exactly how much money is coming in and going out. With a dedicated bank account that handles incomes and expenses, you can easily see how your business is doing from week to week and even year to year. Separate accounts streamline taxes, too, making it easy to itemize deductions and identify reported income.

Banks to research: If you aren’t sure where to start, consider researching these pro-business banks: Found, Relay, and Mercury.

Obtain a Certificate of Good Standing

Once your LLC is registered with the state, you can request a Certificate of Good Standing. This certificate proves that your business is legally established and can conduct business in the state. You can request the certificate through the NYS Department of State.

A certificate like this might be requested when you open bank accounts, apply for a loan, or work with vendors. Customers aren’t likely to ask for it, but it’s still a good idea to have one on file if needed.

Build a website and set up social channels

Every business, no matter its size, needs a website. Follow these steps to get your site up and running:

  1. Get started by researching domain names. Your domain name, or business URL, should be similar to your business name.
  2. Find a web builder that offers hosting and building tools. Most entrepreneurs use a web-building platform that helps them purchase domain names, subscribe to hosting, and create a website with DIY tools. GoDaddy and Domain.com are great places to start.
  3. Tailor the content to your customers. Your website should explain your business, highlight products, and offer contact information. As you set up your site, consider adding the following pages and as your business grows, you can add to the site, but these four pages should serve as the foundation of your site.
    • Homepage
    • ‘About us’
    • Features or services
    • Contact page
  4. Review your site and publish it. Ask friends or family to check out your site. Ask them to navigate each page, read the copy, and click on links. Once tested, publish your site for all to see.
  5. Connect social channels to your site. While you build a social presence, consider setting up social media channels, too. While you might be tempted to join all the channels, choose wisely. You must maintain the channels you select, so start with one or two and add as you go.

Costs of starting a new LLC

Cost to set up a NY LLC is: $209

As you register your formation documents with the state, consider the upcoming costs you’ll likely incur. Here’s a look at costs you’ll pay to establish a business in the Empire State:

  • Incorporation fees: To incorporate a business, you’ll file Articles of Organization with the state. In doing so, you’ll be charged a filing fee of $200.
  • Filing fee for Biennial Statement: In New York, to keep your business in good standing, you must file a Biennial Statement. When you file this report, you’ll pay a state fee of $9.

Foreign LLC registration

An LLC formed in a state other than New York intending to do business in the state must register with the New York Department of State Division of Corporations.

Follow these steps to do business in New York as a foreign LLC:

  1. Comply with New York LLC naming guidelines and confirm that your LLC’s name is available for use in the state using the Division of Corporations Business Search.
  2. Appoint a New York registered agent.
  3. File an Application for Authority with the Division of Corporations. The application must be filed by sending it through the mail and the filing fee is $250.  The certificate must be accompanied by either a Certificate of Good Standing or a Certificate of Existence from LLC’s state of origin that is less than a year old.

FAQs

How do I name my New York LLC?

Whether you set up a business in New York City or Albany, you must check name availability through the state website before you can register it. No two businesses can have the same name.

Is an operating agreement a must?

New York state law requires a small business to have an operating agreement, though it is not filed with state records.

How do I form an LLC in NY by myself?

Setting up a business in NY is fairly easy. With electronic filing, you can register your business online in a matter of minutes. To establish an LLC, you’ll file Articles of Organization with the New York State Department.

What taxes are New York LLCs subject to?

In New York, LLC owners pay both state and federal income tax. You’ll also collect sales tax on items you sell.

How does a sole proprietorship differ from an LLC in NY?

A sole proprietorship is not registered with the state, but an LLC is. A sole prop is easier to set up but doesn’t offer the limited liability protection that comes with a New York limited liability company.

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