How To Register A Business In New York State

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The time has come to move your New York sole proprietorship into a corporate structure so you can take advantage of the tax benefits and protection of personal assets. Forming a limited liability company in New York makes the most sense at this stage due to its simplified taxation rules, ease of formation, and low-cost renewal process. Also adding to the allure of creating an LLC is the fact that New York state changed the laws so certain tax structures are able to operate as a pass-through entity for taxation.

As you start the process of forming your standard or professional LLC in New York, you’ll be required to take actions that include:

  • Picking a name
  • File for an assumed name or DBA if so desired
  • Filing out the articles of organization
  • Designate a registered agent
  • Pay the filing fee
  • Get an EIN from the IRS
  • Select a corporate tax structure
  • Start operating your business as an LLC

New York state offers two types of LLCs: a professional LLC for professional services and a standard LLC. The formation process for a professional LLC in New York and a standard LLC are the same although there are more fees involved in forming a professional LLC. The following is a look at the steps you need to take in order to form a limited liability company in New York state.

Choosing A Name That Passes All The Tests For A Standard LLC In NY

The name of your LLC has to be unique and not already taken by another LLC in the state of New York. You also have to add the words “Limited Liability Company” or abbreviation “LLC” or “L.L.C.” to the name of your business. The Department of State prohibits the use of certain words in the name of an LLC, while others have to be approved by other state agencies before you can file for a limited liability company in New York. Section 204 of the Limited Liability Company Law features a list of words that can’t be used when naming an LLC.

Once you’ve decided upon a name for your LLC, you can search the Corporation and Business Entity database on the Department of State’s website. In the event the name you’ve chosen is available, you can reserve it in advance by filling out a reservation form and submitting it along with the payment of a $20 fee. The name will be held in reserve for 60 days and gives you time to file your articles of organization with the business name of your choice.

You also have the option of filing for a DBA or an assumed name for your business. This gives you the right to be the only business in the state of New York with the name and take action if someone tries to copy or infringe upon it.

New York state requires LLCs to operate under the name it submitted on the articles of organization. If there’s a desire to operate under an assumed business name rather than the one it submitted, the LLC has to file a Certificate of Assumed Name with the Department of State and pay a $25 filing fee.

Complete The Articles Of Organization

The articles of organization is a form that’s submitted to the Department of State along with a $200 filing fee. Once the Department of State has reviewed the articles of organization, cashed or cleared your payment, and reviewed the form, it lets you know that your LLC is formed and you can begin operating as an LLC in New York.

You can pay the filing fee with cash, check, money order, Visa, Mastercard, or American Express. When paying by check or money order, it should be made out to the Department of State. If you want to pay the fee with a credit or debit card, you have to download the credit card/debit card authorization form, fill it out, and submit it along with your articles of organization.

The articles of organization are mailed to:

New York Department of State Division of Corporations

One Commerce Plaza, 99 Washington Avenue

Albany, NY 12231

If your need to form an LLC is urgent, the Department of State offers an expedited handling service with an additional fee. The fee structure is as follows:

  • $25.00 for processing within 24 hours
  • $75.00 for the same day
  • $150.00 for processing within 2 hours

You’ll have to file a Biennial Statement with the Department of State two years from the calendar month of filing the LLC and every two years after that. The filing fee is $9 and has to be accompanied by a certificate of good standing.

Adopt An Operating Agreement For The Llc

Section 417 of the New York LLC law lays out a requirement for the creation and adoption of a written operating agreement. This agreement has to lay out the responsibilities, rights, and limitations of the members, and all members have to sign the agreement to make it valid. The reasoning behind the law is to protect the rights of members and prevent them from being overruled by other members of the LLC. One of the required provisions of the operating agreement is something known as the amendment provision. This provision prevents the majority members from overriding the rights of minority members in the LLC.

You are not required to submit the operating agreement to the Department of State with your articles of organization, but you are required to have one in place in order for the LLC to be recognized in a court of law. However, the operating agreement can be changed at any time the LLC is extant. The courts of New York state won’t hear a case from members of an LLC who haven’t created an operating agreement which makes the LLC essentially non-existent.

Publish The Articles Of Organization In A Newspaper

After the articles of organization have been accepted by the Department of State, you’re required to publish them in two newspapers for six consecutive weeks. The newspapers have to be ones designated by the county clerk for the county that the LLC is operating in. The information in the notice has to match what was submitted to the Department of State. After the six weeks are completed, you are required to submit a Certificate of Publication to the Department of State and include a $50 filing fee.

Get An Ein From The Irs

An EIN, or employer identification number, is a number that’s assigned to your LLC by the IRS for the purpose of reporting taxes. It’s used to report federal payroll taxes if you have employees, pay taxes on corporate income if you choose to operate as a Subchapter S or C corporation, and you can issue 1099s to contractors. You can also select the corporate tax structure for your LLC when you get an EIN. Operating your LLC as a partnership or as an S corporation allows you to treat the LLC as a pass-through entity for the purposes of distribution of income to the members. However, sole proprietors and C corporations can’t use an LLC as a pass-through tax entity.

Register For New York State Sales Tax

An LLC that’s going to engage in the sale of physical goods and certain services has to get a sales tax certificate from the Department of Taxation and Finance (DTF). You’ll find the form for the Certificate of Authority for a Sales Tax Number on the department’s website known as the DTF-17. You won’t be able to operate your business until you’ve been authorized to collect taxes from the DTF, and you may be subject to fines or be restricted in your ability to operate your business until you’ve applied.

You can apply for the certificate on the department’s website or download a PDF to manually fill out and mail in the form. After you’ve registered and received your certificate, you have to file your sales and use tax form by the due date that’s been provided to you by the department. You have to file the form even if you haven’t sold anything that required the collection of sales tax.

If you decide you want to mail in your application, you can send it to:

New York State Tax Department

Sales Tax Registration Unit A. Harriman Campus

Albany, NY 12227

Apply For Local Licenses And Permits

After you’ve set up your LLC, you’re almost ready to open your doors as a corporation. You may need permits and/or licenses to operate your business at the federal, state, and local levels. The New York Business License and Permit Index has a search feature that lets you search for the relevant licenses and permits for your business type. The next step is to check with your local government authority for any permits and licenses you need to legally operate within the city limits. If you’re not sure what kinds of permits or licenses you’ll need, you can check with your local and county government offices for more information.

Getting Help For Filing Your Llc In New York State

Filing for a standard or professional LLC in New York requires the completion of multiple steps, including paying attention to state and federal laws, and taxes. The NYS Department of State recommends getting help from a professional preparation service to fill out the documents as they’re considered legal instruments. At Windsor Corporate Services, we can take care of the work on your behalf and do the necessary research for relevant permits and licenses so you can start your LLC knowing that you have everything you need to start operating as a limited liability company in New York state.

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