Form an LLC in New York
A limited liability company is a business structure that allows pass-through taxation while limiting the liability of its owner.
Should you form an LLC?LLC stands for Limited Liability Company, and as its name suggests, it offers protection to the company’s owners from liabilities and debts incurred by the company. This is important, because it means creditors cannot ask you to pay the company’s debts with your personal assets. An LLC is a good choice for small start-up businesses because it defines the roles of the owners and protects them from fallout if the business goes under.
LLC Advantages:• The owners/members have limited liability for the debts and liabilities of the LLC. • Taxes are based on the owner's personal tax returns, not the business. • Flexibility in distributing losses and profits among owners. • No restrictions on number of owners. • Flexibility in company’s management structure. • Allows for different membership classes. • No meeting requirements and less formal paperwork than S or C Corporations • Perception of legitimacy as opposed to a sole proprietorship or general partnership. • Requires all members' consent to increase ownership. To form an LLC in NY, you will need to file Articles of Organization with the state and pay the associated filing fees. You can form an LLC with Windsor online. Getting your new business off on the right foot is critical to long-term success. One of the earliest steps you should take is to select a legal entity for your new company. For many small businesses and startups, a Limited Liability Company, or LLC, offers the protections of a corporation without the oversight and responsibilities assigned to a larger business.
Is an LLC the Best Entity for Your New Business?Most types of businesses can be established as Limited Liability Companies. One exception is a professional partnership like a law firm or medical office. In such cases, professional partnerships can form a Limited Liability Partnership, or LLP. In New York, LLCs enjoy some of the benefits afforded to large corporations without the hassle and accountability of maintaining copious records and holding regular meetings.
Benefits of forming an LLC in New York include:• Fast and easy setup: The paperwork for opening an LLC in NY is simple to fill out, and you can complete the entire process quickly. • Owners are protected from debts and liabilities of the LLC: Any liabilities your business accrues, including debts, obligations and other liabilities, belong to the business alone. As the business owner, you will not be liable for your LLC's obligations. • Taxes are reported on the owner's personal tax returns: Income earned by your LLC “flows through” to your personal tax return and is taxed as normal income. Members report the LLC’s profits and losses on their personal tax returns, saving time and money. Corporations typically have to pay taxes on their business profits, and then the owners pay taxes again on stock dividends. LLC members are not subject to this double taxation. • Flexibility in distributing losses and profits among owners: LLCs are easy to manage, and you can easily make changes without excessive paperwork. • No restrictions on number of owners: With an LLC it is easy to add and amend members. • Flexibility in the company’s management structure: You can decide how the business will be run without consulting a board of directors. • Allows for different membership classes: Members can own different degrees of membership interests. LLC members can have non-voting interests, preferred interests, or even non-voting preferred interests. The details about each member’s rights and level of interest must be detailed in the Operating Agreement. • No meeting requirements and minimal formal paperwork: You are not required to hold general meetings, assign a board of directors or satisfy burdensome rules and regulations. • Lends legitimacy to small businesses: When you officially create your LLC, you convey the message to customers, service providers and lenders that you are serious about your business.
Advantages of registering an LLC in NY StateNew York is a great state for launching a new business. Its diverse, culturally rich cities and healthy economy offer golden opportunities for business growth and development. The Empire State’s strong industries in technology, finance, investment, media, entertainment and tourism make it an ideal place to build your dream company. New York’s strong economy, with a GDP of $1.44 trillion in 2015, ranks as one of the highest economies in the world.
Steps to form an LLC in New York StateBy following a few simple steps, you can quickly and easily open an LLC in New York State.
- Select a unique and original company name: New York has specific LLC name requirements. The name must be distinct and not used by any other company, nor should it be easily confused with the name of another company. Your company name must end with the words Limited Liability Company or the abbreviation LLC or L.L.C.
- Provide a Service of Process Address for your NY LLC: If you plan to operate your business from home, you can use your home address. If you rent office space, the LLC address can be your service of process address. Or, simply use our address and we will forward any official mail or documents directly to you.
- Choose a Registered Agent service (optional): Your LLC may wish to use a Registered Agent service who will be responsible for receiving official tax and legal correspondence for your business and forwarding those documents to you. Using a Registered Agent service may save you time and money in the long run.
- File your company’s Articles of Organization with New York State: This action officially creates your New York State LLC. This official form is provided by the state of New York and is required for starting an LLC in New York.
- Fulfill New York’s publication requirements for your newly formed LLC: Starting an LLC in New York has certain publication requirements that notify the public of your intent to form an LLC in New York State. Windsor will assist you with fulfilling this requirement.
- Create your New York LLC Operating Agreement: Your New York LLC is legally required to have an Operating Agreement. This agreement outlines how managers and members are chosen, the duties and rights of members, how the business will be managed, how profits will be distributed and other key issues.