You’ve determined that forming an LLC is the best way to organize and protect your business venture. You’ve familiarized yourself with the legal benefits of LLC status and understand the tax implications. Now it’s time to understand how to form an LLC in New York.

Given the nuances of legal jurisdiction from state to state, it is best to partner with experienced legal counsel when forming your LLC. New York is a particularly complex legal jurisdiction, and good counsel can help you navigate the legal requirements and ensure compliance.

This guide explains everything you need to know to form an LLC in New York, from deciding which entity is best for you and determining the fees you can expect to pay, to the paperwork you will need to file and the laws you may need to keep in mind. Most importantly, we’ll explain the benefits of partnering with the right legal counsel to guide you through the entire process.

What is an LLC?

LLC stands for limited liability company. We won’t go into all the legal intricacies here (see our guide to LLCs for a more comprehensive overview if desired), but an LLC is a legal structure that can be ideal for small businesses owners. It provides more protection for business owners than a simple “sole proprietorship,” but is simpler to form and operate than is a corporation.

An LLC also tends to provide sensible tax flexibility, allowing business owners to select to be taxed as either a corporation or as a pass-through entity like a partnership or sole proprietorship. The pass-through election can provide relief for many businesses and business owners, so if you think that an LLC may be right for you, it's important to know how to form one correctly.

Deciding on the Best Entity Type for Your Business

When deciding how to legally organize and categorize your business in New York, you’ll need to do so with the understanding that you may not always be able to select the most optimal option for your needs. The entity type you select will depend on a number of factors that include the number of people you plan to employ, the type of organization you will adopt, and the purpose of the business.

The options generally available to you to structure your business are an LLC, a partnership, or a corporation. The LLC option is the one that is best for many small business and startups, as it provides a good balance between liability and taxation.

A partnership, as the name suggests, is an entity structure in which two or more people co-own and manage the business. Like the LLC, a partnership also offers liability protection - but note that it is more complex to establish than an LLC, and requires greater paperwork and other requirements, such as registration with the state.

A corporation is the most complex of the options to form, but is an option if you are a high-growth company. Corporations are owned by multiple shareholders and are managed by a board of directors. Generally, the complexity and requirements of forming a corporation are best handled by experienced legal counsel.

Creating an LLC in New York: What You Need to Know

It’s easy to want to fly ahead and submit your articles of incorporation as quickly as possible so you can launch your business. Before you do, however, it’s vital to understand the requirements of the state and make sure you’ve covered all the necessary bases.

In New York, some of the things you need to do when forming an LLC are:

Choose a unique name for the business and check that it is available as an LLC name in the state of New York.

Select a registered agent to receive legal documents in the state.

File your Articles of Organization.

Create operating agreements and reports to the state.

Apply for any necessary federal and state tax ID numbers.

How Much Does It Cost to Form an LLC in New York?

The cost of forming an LLC in New York is comprised of several parts. The filing fee for the Articles of Organization is $200, which can be paid online through the New York Department of State website. You will also pay any additional fees for professional services and support. For instance, if you hire a lawyer to do the filing for you, you will pay an additional fee.

Advantages of Partnering with Local Legal Counsel

If you need legal support to form your LLC in New York, it’s worth seeking out local legal counsel who truly understands New York regulations. Experienced business lawyers can provide valuable advice on all aspects of legal structure, and can help you make sure you fulfill all requirements.

Time and money are two of many of the advantages of having an expert lawyer on your team. Furthermore, experienced counsel can save you from the costly mistakes that can come from DIY filing. When you hire a lawyer to handle formation paperwork, you can rest assured that your paperwork is filed properly and that your business is in compliance.

Additionally, if you face any legal issues along the way, you’ll have an established partner to assist you. A lawyer who has seen the paperwork from the beginning can provide invaluable guidance on litigation.

Topic: LLC, Forming an LLC, Business Lawyers, New York