A Limited Liability Company (LLC) is a legal business structure that combines the limited liability of a corporation with the operational flexibility typical of a partnership or sole proprietorship. If you're a business owner seeking to limit your personal liability for business debts and lawsuits, forming an LLC could be an excellent choice. This article offers a step-by-step guide to establishing an LLC in New York.

Step 1: Choosing a Name for Your New York LLC

Your LLC's name must include the words "Limited Liability Company" or the abbreviations "LLC" or "LLC" in New York. Moreover, it should be distinguishable from the names of other business entities already registered with the New York Department of State. You can verify the name's availability using the New York Department of State Division of Corporations business name database.

To reserve a name for 60 days, you can file an Application for Reservation of Name with the New York Department of State Division of Corporations. The application is filed via mail, with a $20 filing fee.

You also have the option to operate under an assumed name, also known as a fictitious business name, "D.B.A.", or trade name. In New York, you can register your assumed name by filing a Certificate of Assumed Name via mail with the New York Department of State. The filing fee is $25.

Step 2: Submit an Address for Legal Papers Forwarding

In New York, the Department of State is automatically every LLC's "agent for service of process," accepting legal papers on the LLC's behalf if it's sued and forwarding them to your LLC You need to provide the Department of State with an address for forwarding these legal documents. Additionally, you can appoint a New York resident or commercial registered agent to receive service of process.

Step 3: File Articles of Organization

Create your New York LLC by filing Articles of Organization with the New York Department of State Division of Corporations. These articles should include the LLC's name, its county location in New York, an address where the Secretary of State should mail legal documents to the LLC, and the signature of the LLC's organizer. The name and address of the filer of the Articles should also be included. The articles can be filed by mail or online, and the filing fee is $200.

Step 4: Prepare an Operating Agreement

Unlike most states, New York mandates LLC members to adopt a written operating agreement. You may enter into this agreement before, at the time of, or within 90 days after filing the Articles of Organization. This document sets the rights, powers, duties, liabilities, and obligations of the members among themselves and to the LLC The Operating Agreement is not filed with the Department of State; it's purely an internal document.

Step 5: Fulfill Publication Requirements

Within 120 days of its articles of organization becoming effective, the LLC must publish a copy of the articles or a notice related to the formation of the LLC in two newspapers. The newspapers must be designated by the county clerk of the county in which the LLC's office is located, as per the articles of organization. After publication, you'll receive an affidavit of publication from each newspaper's printer or publisher. A Certificate of Publication, with the affidavits attached, must be submitted to the New York Department of State, Division of Corporations. The filing fee for the Certificate of Publication is $50.

Step 6: Comply with Other Tax and Regulatory Requirements

Other tax and regulatory obligations that your LLC might need to meet include:

  • E.I.N.: An LLC with more than one member needs an I.R.S. Employer Identification Number (E.I.N.), even if it has no employees. For a one-member LLC, an E.I.N. is required only if it will have employees or if you elect to have it taxed as a corporation rather than a sole proprietorship (disregarded entity). You can obtain an E.I.N. by completing an online E.I.N. application on the I.R.S. website. No filing fee is required.
  • Business Licenses: Depending on your business type, you may need to acquire a license or permit from the State of New York. Local business licenses may also be required, so check with your county clerk and the clerk of the city, town, or village where the LLC will operate. 
  • Annual State Filing Fee: Every LLC that's treated as a partnership or disregarded entity for federal income tax purposes and has any income, gain, loss, or deductions derived from New York sources is subject to an annual filing fee. This fee, paid to the Department of Taxation and Finance using Form IT-204-LL, ranges from $25 to $4,500, depending on the LLC's income.

Taking these steps will guide you in forming an LLC in New York, providing you with a legal framework to protect your personal assets and run your business flexibly. Do consider the advantages and disadvantages of forming an LLC before deciding. While LLCs offer benefits such as limited liability, pass-through taxation, and operational flexibility, they also come with more paperwork and fees compared to a sole proprietorship.

Novo Platform Inc. strives to provide accurate information but cannot guarantee that this content is correct, complete, or up-to-date. This page is for informational purposes only and is not financial or legal advice nor an endorsement of any third-party products or services. All products and services are presented without warranty. Novo Platform Inc. does not provide any financial or legal advice, and you should consult your own financial, legal, or tax advisors.

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