Forming an LLC (Limited Liability Company) in New York is easy and affordable. The following are few procedural steps on how to start an LLC in New York. LLCs can be formed in two ways, domestic and/or foreign. If you are planning to set up an LLC in states other than New York, visit How to Start an LLC.
On this page, you’ll learn about the following:
- Why an LLC in New York
- How to Start a New York LLC
- After Starting your New York LLC
- Best Businesses Operating Currently in New York
- New York LLC Formation Review
Why an LLC in New York
Are you aware of the fact that many top-ranked global businesses are based in New York? The reason behind this is the business-friendly environment that makes New York the most favorable destination for business in the world. Moreover, for start-ups, the New York government has many tax benefits and incentives that will help entrepreneurs to start an LLC in New York. Here are the insights.
Start-Up New York Program
The start-up New York program is a tax benefit program introduced by the state government to bring new start-up ideas and investment into the state. Under this program, a start-up company has to enroll themselves and if they are selected based on criteria fixed by the government. All those companies who get selected are eligible for a tax-free operation at some state locations for a period of whopping 10 years.
Federal Work Opportunity Tax Credit (WOTC)
Under this program, some tax rebate is provided to an LLC in New York on the basis of hiring people who are belonging to a special group. These special groups are those people who have to follow issues at every step in their journey when they step out for employment. That is why the government is being a helping hand for such people and want the New York LLC to hire such people.
For this task, the company will enjoy a tax credit of a minimum of $1200 to a maximum amount of $9600. This amount varies on how many employees of this category are hired by you and the salary they are taking out of LLC accounts. Some of those groups are:-
- People who are unemployed veterans due to some disability. They are highly qualified.
- Recipients from the list of Temporary Assistance for needy Families.
- Community residents who are living in special empowerment zones or rural area of the country that is still under renewal.
- People who have a food stamp.
- Individuals who are on their rehabilitation period and are referred by their centers.
IDA Commercial Tax Incentives
The IDA commercial incentive is a program in which an LLC that is going through changes in their existing building or starting the work of new construction is provided a rebate on the land taxes for up to 25 years according to the construction they are proceeding with. Also, the state sales tax is waived for purchasing construction and renovation material is around 8.875%.
How to Start a New York LLC
Suppose you’re planning to invest in some profitable business structure or maybe about to set up your business in New York. In that case, forming an LLC in New York is the simplest option for you.
An LLC or a Limited Liability Company a hybrid business entity combining a corporation’s characteristics with a partnership or sole proprietorship. This section gives you a step-by-step guide on How to Start an LLC in New York.
Step 1: Decide a Name for Your LLC
If you are to start an LLC in New York, the first thing you do is decide on a business or company name, and how to name your LLC may be tricky. Thus, you have the option to choose a name that complies with the New York business naming requirements. It must also be easily searchable for potential clients. Here is a step-by-step guide to follow when naming your New York LLC.
Why do you need a proper business name?
If you want your LLC to have special identification, your company name is essential. However, many people face lots of issues by avoiding focus on choosing a business name for their LLC business formation filings.
Because of this, here are some of the major benefits of choosing the best LLC corporate names.
- To help establish a company’s presence in the market, a proper business entity type will help you. This also creates a new identity that will resemble your LLC.
- After you’ve properly chosen the name for your LLC, you will have no problems finishing the registration process.
- You can only get the EIN number when you have your name registration certificate with you.
What are the requirements when deciding a name for your LLC?
A name search is vital to make sure your business’ name is unique. Check the availability of your name with Business Entity Search on the New York Secretary of State’s website. Submit your reservation application for your LLC name by completing the Name Reservation Request Form for Domestic Entities.
- Don’t include words that could confuse people about your company. Words like ‘treasury, state department.’
- You should also avoid restricted words like ‘bank, attorney, university,’ because they may require a lawyer and more paperwork.
- As for a business website and your URL name, check if your name is still available for domain use with NameCheap.
Reserve a business domain
Even if you don’t have plans to set up a website today, it will help if you buy a domain to avoid others from using your name for their website, so do visit NameCheap for your domain name and Kinsta for web hosting.
If you have decided on your URL name and have reserved it, set up a professional email account with Google GSuite.
Step 2: Assign a Registered Agent in New York
A registered agent, or business entity, is a person that will act or work on your behalf. This person or business will receive significant tax forms, legal documents, a notice of lawsuits, and other official government correspondence in New York. Choosing New York-registered agents for your LLC is required.
Make sure your registered agents are residents of Alabama. It could also be a business. Here are the recommended agents and employees for you:
These five LLC formation services are recommended agents’ registered services as they are authorized to conduct business in New York. Compare them to check the best yet cheapest option for you. Besides, they can guarantee you professional service because they have been in the business for years.
Step 3: File Articles of Organization in New York
A Certificate of Name Reservation is needed to file Articles of Organization, as other states call it. You need to make reports of this certificate with the New York Secretary of State, which costs $200. You may file them online or by mail.
This Certificate of Formation is a legal document needed to form your business officially. It will indicate details about your LLC in New York, like if it is a member-managed or managers-managed.
Before you start filings, you must already have your LLC name and registered agents or employees. You will attach a copy of your Name Reservation Certificate along with a list of the services that your New York LLC will offer.
How to File Online
Go to the Secretary of State Online Service. Select “non-subscriber.” Fill out the online form. The website will alert you if your county does not support online filings after selecting your principal county.
How to File by Mail
If you prefer filing real-life forms for your Indiana LLC registration, then you can download the New York Limited Company Certificate of Formation. Read the form thoroughly and fill it out. It will have to fill, among others, your name, city, state, zip code, and signature.
Step 4: Create Your New York LLC Operating Agreement
An operating agreement is a document that legally outlines the proprietorship and operating procedures of your LLC This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts.
Starting an LLC in New York does not require you to have an operating agreement, but it is ideal to have one that contains all your details of business operation.
Step 5: Filing a New York LLC EIN
The Employer Identification Number or, simply, the E.I.N. is a nine-digit number given by the Internal Revenue Service (IRS) to make it easier to identify types of business for tax purposes. It is like a Social Security number dedicated to a business.
It is also called a Federal Employer Identification Number (FEIN) or a Federal Tax Identification Number (FTIN). You will need this number for tax filing and to determine tax classification options.
Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999
Fax: (855) 641-6935
After Starting your New York LLC
After forming your LLC, there are still some things that you will need. Take note of the following:
- Get a company business account
- File New York business permits & licenses
- Get liability for business insurance with coverage for employees
- File a New York LLC annual report or biennial report
- Already existing LLCs that wish to operate in New York must register as a foreign New York LLC.
This page has provided you with steps to LLC formation and filing processes. You now have to remember the necessary forms needed for the application of permit and licenses, upcoming filing deadlines, and filing fees or filing costs, including fees for late filings to make sure your LLC is up-to-date.
Best Businesses Operating Currently in New York
When you want to form an LLC in New York, then it is crucial for you that you have complete knowledge of the business environment of the state. To help you in this process, we have mentioned some valuable information below.
How can a person forget the wall street of Manhattan when talking about New York Businesses? The state’s stock exchange and silicon valley are continuously growing since the year 1817 are impacting the whole world with one action. The contribution of this incredible sector to the economy is $211 billion.
Most of the products that are manufactured in the state are basically for the purpose of exports. Only a few amounts of goods are kept for local use. General software, mobile devices cover the manufacturing industry’s biggest chunk and clothes manufacturing. The contribution of this sector is $64.83 billion, and it is also indirectly supporting the export sector. It accounts for $84.7 billion, which has vegetables and manufactured products in it.
Media and Entertainment
The most prominent media houses of the USA are present in the state that is controlling global trends. Some of the biggest ones are CNN, News Corporation, The New York Times Company, etc. These media houses alone have helped many people generate their livelihood and have contributed around $9 billion to the GDP. The tax that this industry has filed in the year 2014 was accounted for $240 million, which is enormous for the non-manufacturing sector.
The modern state of New York is also rich in its agricultural activities due to its deep fertile soil. Crops produced in the state are pears, strawberries, dairy goods, etc. 25% of the total area allocated to the state is consumed for farming purposes that have recently contributed to around $4.28 billion to the state’s GDP.
Some small businesses that are thriving well in New York are:-
- Food delivery business
- Property management
- Online trading
New York LLC Formation Review
Time needed: 1 hour and 5 minutes.
Just to recap, here are the easy steps again when forming an LLC in New York. Click on the steps in this list to read the full detail.
- Name your New York LLC
The first thing you must do is to choose a company name, which should include the phrase “limited liability company,” or one of its abbreviations (LLC or L.L.C.).
- Choose a registered agent
In New York, it is mandatory to select a registered agent for your LLC. You can check out our list of our 5 Best LLC Services in the United States.
- File a formation certificate
Filing a formation certificate is necessary when forming an LLC. Depending on the state, it could be called any of the following: Certificate of Formation, Articles of Organization, or Certificate of Organization.
- Create operating agreement
An operating agreement is not a strict requirement but something encouraged when you start an LLC.
- Get an EIN
The Employer Identification Number (EIN), also called Federal Tax Identification Number, serves to identify a business entity like a social security number but for a company.
A “domestic LLC” is one that conducts business in a state where it was formed. Meanwhile, a “foreign LLC” is an existing LLC that extended business to another state.
For Domestic LLCs, it is vital to have a Certificate of Name Reservation and Certificate of Formation. For the foreign LLCs, you must have a Certificate of Good Standing.
The cost to form an LLC varies per state.
Seldom do L.L.C.s use D.B.A. or a ‘Doing Business As’ name nor a fictitious business name. However, if you want to have one, you make read more about DBAs here.
This document is vital as it ensures that all business owners are on the same page regarding how they operate, thus reducing future conflicts.
>Your name should have “L.L.C. or LLC” or the phrase “limited liability the business.”
>Do not include words that could create confusion between your LLC and any government business.
>Words like ‘bank, attorney, university’ are restricted as well.
>Lastly, your name should distinguish from other limited liability corporations, limited partnerships, or registered limited liability partnerships.
Typically, you can file your LLC name online or by mail. Check with the state where you will set up your LLC name. Take note that the fees for business names may also vary per state.
As for a website and your URL name, check if your name is still available for URL use with NameCheap to see if your name is available as a web domain. Even if you don’t have plans to set up a website today, it will help if you buy a URL. Buying it can help to prevent others from getting your name; check out WPEngine, Kinsta, and GoDaddy for hosting and building your website.
No. Never mail these documents or payments to the Secretary of State directly.
The reason you might need an E.I.N. is that it would help for three reasons:
>Opening a business bank account
>Filing and managing federal and state taxes
>Hiring employees or agents
You are not required a Social Security number when getting an EIN. You can proceed to fill out I.R.S. Form SS-4 and leave section 7b blank. You must then call the IRS at (267) 941-1099 to complete your application. Agents or employees will help you with that.
International EIN applicants do not need an SSN to get an EIN.
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