Having a New York LLC is a better and cheaper option than having other business structures. A limited liability company (LLC) reduces the owners’ personal liability and protects their personal assets. One can start an LLC in two ways, domestic LLCs or foreign LLCs (LLCs in more than one state). By following some basic steps, you can easily form an LLC in New York.
On this page, you’ll learn about the following:
- How to Start an LLC in New York
- After Starting your New York LLC
- New York Foreign LLC
- Why an LLC in New York
- Best Businesses in New York
- New York LLC Formation Review
How to Start an LLC in New York
An LLC or a Limited Liability Company is a hybrid business entity combining a corporation’s characteristics with a partnership or sole proprietorship. It separates your personal assets from your business assets, thus giving you personal asset protection. 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
Deciding on a business name is the first step to start an LLC. In New York, before you name your LLC, it is important to note a few things. Firstly, make sure the name is available to use. If the name is available, then check if the name complies with all the New York business naming requirements. Once you pass through them, you can successfully name your business.
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.
Requirements when deciding a name for your LLC
LLC Name Search: A business name search is required to check if the desired name is available or not. If the name is available then the business owner has to fill up a name reservation form and send it to the Secretary of State, New York. To do the name search, one has to visit the Business Entity Search page on the official Secretary of State website. Send the name reservation form to the below address by mail to reserve your LLC name in New York. The cost of a name reservation is $20.
Important Quick Links:
New York State, Department of State
Division of Corporations, State Records
and Uniform Commercial Code
99 Washington Avenue 6th floor
Albany, NY 12231
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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 forms, formation documents, any internal document, a notice of lawsuits, and other official government correspondence in New York. Choosing a New York registered agent for service of process for your LLC is required.
Make sure your registered agents are residents of New York. It could also be a business with an office address. Here are the recommended agents and employees for you:
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Note that availing of the services of professional registered agents would be your best option since you are guaranteed that whoever is handling your legal affairs knows their stuff well. You will enjoy peace of mind and focus only on running your business, as the ‘professionals’ take care of all legal matters.
These LLC formation services are recommended registered agent 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. LLC cost in New York includes other taxes and fees. You may file them online or by mail.
This New York 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. LLCs with employees need to check the New York government portal for guidelines to hire employees.
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. To know more about online filing, visit the New York Certificate of Formation.
How to File by Mail
If you prefer filing real-life forms for your New York 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. You may also file in person by visiting the office on business days.
Mail To: Department of State Division of Corporations
State Records and Uniform Commercial Code
One Commerce Plaza
99 Washington Ave.
Albany, NY 12231
Fax: (518) 474-1418
Step 5: 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.
When it comes to an LLC operating agreement New York does not require you to have a comprehensive operating agreement, but it is ideal to have one that contains all your details of business operation. This document would be useful if you decide to dissolve New York LLC later.
Step 6: 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 and taxes in general. It is like a Social Security number dedicated to a business’ taxes. The EIN is necessary for any active business or any form of business for that matter.
To obtain EIN (aka FEIN) one has to fill up a form (Online or by mail) and submit it to the IRS. Before sending the form, ask for EIN Assistant. Enter details of your LLC, and finally complete the form and send it to the address given.
Mail to: Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999
Fax: (855) 641-6935 | Fee: Free
Note: You don’t need 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.
And that’s all! Congratulation, you are now done with all the necessary steps to form your New York LLC. If you still haven’t used a professional service from here, I strongly recommend having one to handle the remaining tasks.
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 bank account
- File New York business permits & licenses
- Get liability for business and professional liability 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 New York foreign LLC.
This page has provided you with steps to LLC formation and filing processes. You now have to remember upcoming filing deadlines and filing fees or filing costs, including fees for late filings to make sure your LLC is up-to-date.
New York Foreign LLC
To register a New York foreign LLC, one has to file the foreign LLC formation certificate with the Secretary of State, New York. Forming a foreign LLC allows you to operate your business in more than one state in the USA as a single business entity. Check New York Foreign LLC to know more about having a foreign LLC.
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. To start an LLC in New York, business owners need to get different permits such as building permits, signage permits, and health permits if it is a restaurant or food-related business.
Moreover, for start-ups, the New York government has many tax benefits like reducing tax liabilities and incentives like business funding options that will help entrepreneurs 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 investments into the state. Under this program, a start-up company has to enroll themselves and select 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-based on hiring people 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 helping hand for such people and wants 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 living in special empowerment zones or rural areas of the country are 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 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%.
Best Businesses in New York
When you want to form an LLC in New York, you must have complete knowledge of the state’s business environment. 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 1817, 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 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 failed in 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
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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 be unique, easy to find, and available in the state.
- 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.
If you are a resident of New York, then you can file your LLC by yourself. However, it is always worth having a professional than doing it yourself to handle legal complexities, paperwork, and other documentation.
Apart from the formation fee of $200 (domestic LLC) and $250 (foreign LLC), LLC costs in New York include $9 for Biennial Reports every year. LLCs are liable to pay sales tax of 4% every year.
It takes no time (immediately) to get a New York LLC if you file it online. For the mail filing, it takes 3 to 5 business days to get an LLC.
Every year all the LLC have to submit an Annual Report and pay $9 every 2 years to the New York Secretary of State and renew the LLC. It is mandatory to renew your LLC every year.
Generally, for the LLCs, it is a default tax structure. Once you will obtain the EIN, you will get the various tax structure options to select. Sometimes LLCs choose S Corp to reduce federal tax burdens.
LLCs are easier to establish than other business structures. Small businesses, especially start-ups can easily start their LLC in New York at a bare minimum cost. LLCs have a ‘pass-through taxation’ advantage for which they are excluded from certain taxes. The formation of limited liability companies requires much lesser documents and legal processes. Share your queries with us, leave a comment below.