If you have chosen New York as your next business ground, it’s recommended to form an LLC by filing the Articles of Organization by mail or online. The cost of filing this paperwork is $200 payable to the New York Department of State Division of Corporation. Doing so creates your LLC in New York, and you can enjoy some features that come with it.
Here are the six steps to adhere to when forming a New York LLC. Read on!
- Select a New York LLC Name
New York has so many businesses. If you want to open a business here, you must ensure that your company name is unique, and no other business has already acquired it. Search the name’s availability on the New York State website, and go for one with a web domain to have an URL that matches your business name.
During the naming process, follow the set rules for a New York LLC.
- A company name includes; Limited Liability Company, L.L.C., LLC, Company, Co, Limited, or Ltd.
- A name that doesn’t mention any government agency like the FBI, Treasury, etc.
- Some words such as Attorney, Bank, and University may require additional approvals from the state to be a part of your LLC name.
- Choose a New York Registered Agent
The Secretary of State is the registered agent by default for all LLCs in New York. And even if you choose a different registered agent, the Secretary of State remains the number one point of contact for both the state and your New York LLC.
What is a Registered Agent? – A registered agent is a company or an individual that acts on behalf of a business entity to send and receive official and legal documents. And the registered agent must be a resident or have a physical address in New York, with the authority to conduct business in the state.
If you choose to appoint your own registered agent, the Secretary of State forwards the following information to the registered agent address.
- All service of process information.
- Formation documents.
- Taxation, as well as reporting documents.
Using a registered agent in New York can save you about $1500 or more when publishing the mandatory Notice of Formation in local newspapers.
- File the Articles of Organization for Your New York LLC
Filing the Articles of Organization in New York is either done online or by mail with the Secretary of State. Other states term this document as the Certificate of Formation or the Certificate of Organization.
The New York Articles of Organization filing fee is $200 non-refundable and payable to the Department of State Division of Corporations.
Here is some of the information to submit for your Articles of Organization.
- Name of your LLC.
- A registered agent – name, address, and signature.
- List of services to offer
- How your LLC will be managed (either manager-managed or member-managed).
- Pay the state filing fee.
This document becomes a public record when the state approves it.
- Follow Publication Requirements for New York
120 days after forming your New York LLC, you’re required to publish a Notice of Formation (copy of the Articles of Organization) in two newspapers.
There is one daily and one weekly publication, and you must choose a newspaper approved by the local county clerk in the county your business formation will be taking place. Each newspaper publisher serves you with an affidavit of publication.
After this, you should submit your affidavits together with the Certificate of Publication to New York State Secretary – Divisions of Corporations.
The fee for a publication requirement is $50 non-refundable and payable to the Department of State.
- Create an Operating Agreement for Your New York LLC
An operating agreement can either be a verbal or written agreement, and it’s a good step towards avoiding misunderstandings among the owners or members of an LLC organization.
What is an Operating Agreement? It’s a legal document outlining the ownership and the structure of an LLC. It limits problems arising in the future and ensures everyone is on the same page when forming an LLC.
Some of the information included in this internal document include:
- The owner of the company.
- The investors and other members.
- How it will be managed.
- Day-to-day operations and who is responsible for managing them.
- How future problems or conflicts should be resolved.
- How profits are shared, etc.
- Apply for an EIN
Lastly, obtain an EIN (Employer Identification Number) for your New York LLC. It’s the same thing as FTIN (Federal Tax Identification Number) or FEIN (Federal Employer Identification Number).
What is an EIN? – It’s a 9-digit number issued by the IRS (Internal Revenue System) that identifies a business entity and keeps track of its tax reporting. In other words, it can also be referred to as an SSN (social security number) for the company.
Obtaining an EIN allows you to:
- Open a business bank account.
- File both federal and state taxes for your business.
- Hire employees for the company.
Benefits of Starting a New York LLC
New York is a blooming state, and forming an LLC for your business shouldn’t be ignored. That’s because such a business formation comes with lots of benefits.
Here are some benefits:
- Business credibility.
- Personal asset protection.
- Pass-through taxation.
- Ease of maintenance.
- Flexible management structure.
- Easy access to business loans.
FAQ About Starting a New York LLC
What is an LLC? – It stands for Limited Liability Company and has a simple business structure as compared to a traditional corporation.
Can I Be my Own Registered Agent?. – The Secretary of State is the default registered agent in New York, but you can act as one when you have a permanent physical address.
How Long is the Processing Time of Starting an LLC in New York? – An online application is immediate on approval, but by mail, it takes 3-5 business days.
Will I Be Filing an Operating Agreement with The New York State? – No, it’s a document filed within your organization for future references.
Do I Need an SSN to Get an EIN? – Visit the IRS website and submit Form SS-4 to get an EIN even if you don’t have an SSN.
Famous for being known as the world’s center of businesses, New York state is an excellent place where you can meet more successful entrepreneurs in your business line. Follow the six steps above to start an LLC in New York, and get financial independence along the way.