When you're starting a business, one important decision is choosing an entity structure. You may decide to form a limited liability company (LLC), if you want some of the benefits of a partnership with the legal protections of a corporation. This step-by-step guide will take you through the process of forming a New York LLC.
How to start an LLC in New York
The New York Department of State sets the eligibility requirements for LLCs in the state of New York.
Step 1: Choose a name for your New York LLC
The name of your LLC has to meet certain state guidelines. Choose a name that makes sense for your business.
Your LLC name must:
- Contain the words “LLC," "L.L.C.," or “Limited Liability Company.”
- Not contain any of the state’s restricted words or phrases.
- Be unique from the names of other registered businesses in New York.
This last requirement is perhaps the most difficult to follow. To check whether an LLC name is available, review the state's Corporation and Business Entity Database. Also check Yelp listings and the Yellow Pages. But the only way to confirm the availability of an LLC name is to submit a written request to the Department of State. You'll have to pay a $5 fee for each name you'd like them to research, but the state can confirm whether your chosen name is available. You can then reserve it for up to 60 days by paying a $20 name reservation fee.
If you decide that you'd like to operate under a name that's different from your legal name, you'll need to file a Certificate of Assumed Name. Some states call this a fictitious name or a “doing business as” name.
Step 2: Provide an address for receiving official mail
The New York Secretary of State serves as the registered agent for New York LLCs. The registered agent accepts official mail on your business's behalf and forwards it to you.
In your articles of organization, you'll need to specify where you'd like official and legal documents sent. Typically, this will be your business's principal address in New York.
You can choose your business lawyer or another individual to act as an additional registered agent. You can also opt for an online legal service, such as Bizee or LegalZoom, to help with your LLC registration.
Step 3: File your articles of organization
Next you'll need to create and file your LLC articles of organization. Your articles of organization establish your LLC as a separate legal entity. It includes basic information about your LLC, including:
- The name of the business.
- The county it's in.
- Your registered agent's name and address.
- The filer's name and address.
The filer can be you, another business owner or even someone from outside the business.
You can use the fillable document from the Department of State to complete the articles of organization. Or you can download and complete it by hand. Be sure your LLC's name is exactly the same in all the required places.
When you file, you'll need to pay the one-time nonrefundable filing fee, which is currently $200. If you file online, you'll receive your receipt and acknowledgment via email.
Step 4: Obtain the proper New York business permits
In New York, over 30 professions require a license from the state. Examples include barbers, security guards and real estate brokers. If your business is in a highly regulated industry, you'll likely need a special permit to operate.
New York State's Business Express Wizard can help identify the licensing regulations for your business. You can also contact your city, borough or county licensing agency to learn more.
But there are also industry, licensing and zoning rules to follow. Many of these are specific to your city or municipality. For example, daycares and food service establishments require special permits. In New York City, even temporary situations or one-time events, such as a grand opening in a public park, need special permission from the city.
Research the rules for location-specific requirements. Get the necessary licenses and permits so you can legally start your LLC in NY. For guidance on legal obligations, consult the business resources your city offers. In New York City, you can use the step-by-step online business wizard to determine exactly how to start a business in the city.
Step 5: Publish notice of LLC formation
New York state law requires you to publish a copy of your articles of organization or a notice of your LLC formation. To comply with this requirement, you need to publish:
- in two newspapers (one daily and one weekly),
- for six consecutive weeks,
- within 120 days of your LLC formation.
You have to publish your notice in newspapers approved by the county where your LLC is located. To find out which newspapers are acceptable, contact your county clerk.
If you choose to publish a notice instead of your articles of organization, be sure the LLC name in the notice matches the name you listed in your articles of organization.
To get your notice published, contact the newspapers yourself or hire a third-party service to handle it for you.
The newspapers will provide you with an affidavit of publication, and they'll charge a publication fee. New York City-based businesses may have to pay steep publishing rates for local newspapers. To save money, you may choose a registered agent outside New York City so you can use that address as your LLC's office address. That way you could run your publication notice in a newspaper in that county, which likely has lower publishing rates.
Once you've fulfilled the publication requirement, you'll need to submit a Certificate of Publication, along with a $50 filing fee, to the New York Department of State.
⚠️ If you don’t complete this requirement within the 120-day timeframe, the State Department will suspend your LLC's ability to conduct business.
Step 6: Create an LLC operating agreement
New York State requires members of an LLC to adopt a written operating agreement. You can do this before, at the time of or within 90 days after filing your articles of organization. But it isn’t optional.
That said, you don't need to file your LLC operating agreement with NY state. And the law doesn't indicate consequences for not adopting an operating agreement. But you'll want to create one to form the backbone of your business.
Generally, an operating agreement includes the following:
- Basic company information: legal name of the LLC, address, registered agent.
- Business purpose.
- Duration of the business.
- Tax treatment.
- Member and manager information.
- Member contributions including rights and responsibilities.
- Member meetings.
- Voting and approval rights.
- Member compensation.
- New members and exit rights.
- Rules for company dissolution.
To create this document, you may want to use an online legal service or work with a business attorney.
Maintaining good standing for your New York LLC
If you’ve reached this point, congratulations! But there are a few more steps to follow to keep your LLC in good standing with the state.
Pay New York business taxes
First, you'll need to pay business taxes. LLCs are taxed as pass-through entities. This means the responsibility for paying federal income taxes falls on the LLC owners.
New York state also assesses an annual filing fee on most single-member and multi-member LLCs. The fee ranges from $25 to $4,500 depending on your LLC's income.
If your LLC has employees, you'll also need to pay federal and state employment taxes. If you sell goods to customers, you'll have to collect and remit sales taxes.
LLCs in NY also have to update their contact information every two years with the New York Department of State. This biennial statement has a $9 filing fee.
Comply with federal requirements
You may need to get a federal tax ID, also called an employer identification number (EIN). You'll use your LLC's EIN when filing your business taxes. Sometimes, an EIN is also necessary when opening a business bank account or applying for business loans. If you're starting an LLC with employees, you're required to get an EIN and register with the New York Department of Labor. You can apply for one for free through the IRS.
As an LLC, you also need to decide how you want to be taxed. You can choose to be taxed as a pass-through entity or as a corporation. There are benefits with either option. Ultimately, you have to determine what will work best for your business.
How much does an LLC cost in New York?
The cost to form an LLC in New York varies by business. For a simple filing of your articles of organization, including the mandatory publication certificate fee, you’re looking at $250. However, if you require many of the additional services listed below, then you’re looking at a total cost closer to $350.
- $200 for Articles of Organization.
- $250 for Registration of a Foreign LLC.
- $20 for a Name Reservation.
- $25 for a Certificate of Assumed Name.
- $50 for a Certificate of Publication.
- $60 for an Amendment.
- $60 for a Correction.
Not sure if an LLC is the right business entity type for you? Take our quick quiz below to find your business structure match.
