If you are thinking of starting a business in New York, one of the options you have is to form a limited liability company (LLC). An LLC is a type of business entity that combines the benefits of a corporation and a partnership. It offers limited liability protection to its owners, who are called members, and allows them to avoid double taxation by passing through the profits and losses to their personal income tax returns.
In this blog post, we will guide you through the steps of how to register an LLC in New York. We will also cover some of the advantages and disadvantages of choosing an LLC as your business structure.
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Step 1: Choose a name for your LLC
The first step of forming an LLC in New York is to choose a name for your business. The name must be unique and distinguishable from other existing businesses in the state. You can check the availability of your desired name by using the New York Department of State’s online database.
The name must also include the words “Limited Liability Company” or the abbreviation “LLC” or “L.L.C.” at the end. You cannot use words that imply a different type of business entity, such as “corporation”, “incorporated”, “partnership”, or “trust”. You also cannot use words that are restricted or prohibited by law, such as “bank”, “insurance”, “attorney”, or “education”. You may need to obtain approval from certain agencies or authorities if you want to use words that relate to specific professions or industries.
If you want to reserve your chosen name for 60 days before filing your articles of organization, you can file an Application for Reservation of Name with the Department of State and pay a fee of $20.
Step 2: File your articles of organization
The next step of forming an LLC in New York is to file your articles of organization with the Department of State. The articles of organization are the official document that creates your LLC and establishes its basic information, such as its name, address, purpose, duration, and registered agent.
You can file your articles of organization online or by mail. The filing fee is $200. You will also need to provide a copy of your name reservation certificate if you have one.
The articles of organization must include the following information:
– The name of your LLC
– The county within New York where your LLC’s office will be located
– The street address of your LLC’s office (if different from the county address)
– The name and address of your LLC’s registered agent
– A statement that your LLC is formed under the New York Limited Liability Company Law
– The purpose for which your LLC is formed (this can be general or specific)
– The duration of your LLC (this can be perpetual or for a specified period)
– Any other provisions that you want to include in your operating agreement
Step 3: Publish a notice of formation
One of the unique requirements of forming an LLC in New York is to publish a notice of formation in two newspapers within the county where your LLC’s office is located. The notice must include the same information as your articles of organization, plus the date of filing and a statement that the Secretary of State is the agent for service of process.
You must publish the notice once a week for six consecutive weeks in one daily and one weekly newspaper that are designated by the county clerk. You can contact the county clerk’s office to obtain a list of approved newspapers and their fees.
After publishing the notice, you must obtain affidavits of publication from both newspapers and file them with the Department of State along with a Certificate of Publication and a fee of $50.
Step 4: Create an operating agreement
Another requirement of forming an LLC in New York is to create an operating agreement. An operating agreement is a written document that outlines how your LLC will be managed and operated. It covers topics such as:
– The rights and responsibilities of the members
– The allocation of profits and losses among the members
– The procedures for making decisions and resolving disputes
– The rules for admitting new members or transferring ownership interests
– The dissolution and termination of the LLC
Although you do not need to file your operating agreement with the Department of State, you must have one in place within 90 days after filing your articles of organization. You must also keep a copy at your LLC’s office and make it available to any member upon request.
An operating agreement is essential for protecting your LLC’s limited liability status and avoiding potential conflicts among the members. It also allows you to customize your LLC’s structure and operations according to your preferences and needs.
Step 5: Obtain an employer identification number (EIN)
The final step of forming an LLC in New York is to obtain an employer identification number (EIN) from the Internal Revenue Service (IRS). An EIN is a nine-digit number that identifies your LLC for tax purposes. You will need an EIN if you plan to:
– Hire employees
– Open a bank account
– File tax returns
– Apply for business licenses or permits
– Conduct business with other entities
You can apply for an EIN online, by phone, by fax, or by mail. The application is free and takes only a few minutes.
Congratulations! You have successfully registered an LLC in New York. Now you can start running your business and enjoy the benefits of limited liability, flexibility, and simplicity. However, remember that forming an LLC is not the end of your legal obligations. You must also comply with the ongoing requirements of maintaining your LLC, such as:
– Filing an annual report with the Department of State and paying a fee of $9
– Filing federal, state, and local tax returns and paying any applicable taxes
– Renewing your business licenses or permits as needed
– Keeping accurate and updated records of your LLC’s finances and activities
– Following the terms of your operating agreement and the New York Limited Liability Company Law
By following these steps and requirements, you can ensure that your LLC remains in good standing and continues to serve your business goals.