8 Easy Steps to Incorporate a Limited Liability Company in New York
Do you need to incorporate your business? There are several important reasons why it’s a great idea to incorporate an LLC in New York.
Why Should You Consider Incorporating an LLC in NY?
The main advantage of forming a limited liability company is the ease of being a Sole Proprietor with similar protection, especially legal and financial, as a corporation. Most importantly, the debts and obligations of the LLC will be considered separate from your personal financial profile.
Requirements and Eligibility
To form an LLC in NY State, you, as the business owner, must be considered to be a New York State resident. The only other way to be deemed eligible for filing an LLC in the state is if the company is based there. It’s very straightforward; either the business or the owner must be in New York.
Of course, each city and municipality will likely have requirements and regulations. For example, New York City has an entire section of its official webpage dedicated to informing prospective business owners about how to start a company.
Before you decide where you want to have your new business located, be sure to carefully review the requirements and regulations that are unique to the area. This initial first step can save you many headaches down the line!
8 Steps to Forming an LLC in NY
- Decide a name for your LLC – choose your name wisely, as you won’t want to have to jump through hoops in the future if you decide you no longer like it. If you are a public-facing business, choosing a name that reflects what your business is all about is a smart idea. Your name must contain Limited Liability Company or LLC as part of the business name. Many words cannot be a part of your business name, including Doctor, College, Bank, and the like. Remember to do your research before determining the title. You will also need to search to ensure the name isn’t already used. Submit a written request with $5 to the Department of State. This will ensure that your name won’t cause any future issues. Once the state has cleared the name, you can reserve it for up to 60 days by paying a $20 fee.
- Find a Reputable NY Registered Agent – in the State of New York, the office of the New York Secretary of State will serve as the registered agent for your company. This is the case for all LLCs formed in the State of New York and is an automatic process once you register your LLC. You are also allowed to name an additional Registered Agent. In most cases, this will be your business lawyer, with the documents and correspondence sent directly to their offices. This is just one reason why keeping all contact details for your business up to date with the Office of the Secretary of State for New York is important. Some LLCs opt to have online lawyer services as their Registered Agent. The choice is up to you, depending on what will make the most sense for your business.
- File Organization’s Articles with NY State – this is the paperwork that “creates” your LLC. This document is the foundation for forming your business, so review it carefully before submitting it to the state. This is where you will decree whether the LLC is manager-managed or member-managed. In an LLC that has been set up as manager-managed, the ownership team will designate one or two members to handle the company’s day-to-day business. Member-managed LLCs reflect an organization where all members, or owners, are involved in the company’s day-to-day running. This is not an issue for single-member LLCs, and no determination needs to be made. The Department of State provides a two-page Articles of Organization document template that can easily be filled out online. Double-check that all names, titles, and addresses are correct, as you don’t want to worry about having to amend this form due to clerical errors. The current fee for filing this document is $200.
- Obtain NY Business Permits – does your area of business require a license? There are over 30 business types and professions that need licenses. Be sure to have all the necessary permits and licenses before operating your business. In addition to checking the regulations and requirements at the state level, you will also want to familiarize yourself with the local requirements. This means the county, city, town, or municipality where you plan to locate your business. There can be a number of requirements at the local level, so be sure to consider this when you are determining the timing for opening your business. Industries such as food service, child care, and healthcare are typically well-regulated at all levels of government, so plan accordingly if you will be operating in those areas.
- Publish Notice of Your LLC Formation and Submit Publication Certification to the State – within 120 days of filing your LLC paperwork, you will need to publish its formation. New York State requires that the notice of the formation of your LLC be published in two different publications, one with weekly circulation and the other with a daily reach. This notice must be published for six consecutive weeks. Before taking this action, you will need to ascertain the approved publications for a notice from the County Clerk’s office. Owners can publish either a notice or a copy of their Articles of Organization. If you opt to go with printing a notice, be sure that all required information is included. Once the process is complete, the publication will provide you with an affidavit of publication. This document will be turned into the state along with a completed Certificate of Publication which currently has a filing fee of $50. If this step is not completed satisfactorily within the allowed 120 days, the LLC will be revoked along with the company’s ability to conduct business in the state.
- Create an LLC Operating Agreement – within 90 days of filing your company’s Articles of Organization. You will need to create and submit the Operating Agreement of the LLC. There is not much enforcement around what is included in the Operating Agreement, just that one must be filed within the 90-day time frame. However, the Operating Agreement is a key document in and of itself and something that you will want to do correctly. You will need to include basic information about the LLC in this document, such as the name, address, and any additional registered agents that the company may have. This is also the place to spell out company rules and actions for current and future use. There can also be a process outlined in this document for the dissolution of the LLC at some future point. This document is often more useful when it is completed with the aid of a business attorney.
- Keep Your LLC Active – Next, you will want to take steps to get your business going. You’ll want to open a business banking account, secure a credit card, obtain accounting software, and create some business cards, just to name a few! Be sure to get everything set up immediately for accurate and timely paying of your taxes. Every year the LLC is active, you will be required to pay a filing fee. The amount of this fee is based on the revenue and income of the entity. You will be required to update all contact information with the Secretary of State regularly. There is a nominal fee for this filing, which is currently $9 for the biennial filing. You will also be required to pay taxes for any active employees the LLC may have.
- Comply with the Federal Requirements – In most cases, you will also need to obtain an Employee Identification Number (EIN). This is a federal requirement. This number is often also referred to as a federal tax number. An LLC with employees must obtain such a number and file this number with the New York Department of Labor. Another component of compliance with all federal requirements is determining your taxability status. You can be taxed as an LLC pass-through partnership or a corporation when using an LLC. If you want to make any changes to your taxability status in the future, simply fill out Form 8832, which you can obtain from the IRS website.
Turn to the pros when it is time for you to form an LLC in New York
Forming an LLC is a process that benefits from legal advice and knowledge. There are many advantages to having your business lawyer or another legal professional help you complete and file these documents. While filing an LLC is not onerous, there are many parts. If you need to incorporate an LLC in New York, you don’t have to go it alone. We can help! Get in touch with us today, and let’s incorporate LLC NY for your company.