When you are starting a business in New York, there are certain legal requirements that you must follow. One of the legal structures you may want to consider is a Disregarded Entity (also known as a “Single Member LLC”). However, navigating the legal landscape of New York can be complicated and many business owners are unfamiliar with the laws and regulations regarding Disregarded Entities. This article is intended to give business owners an overview of what a Disregarded Entity is, what the benefits of forming a Disregarded Entity in New York are, and how to get started with a Disregarded Entity in New York.

What is a Disregarded Entity?

A Disregarded Entity is a type of Limited Liability Corporation (LLC). If you are familiar with the concept of a LLC, it is important to remember that a disregarded entity is still an LLC; the only difference is that it is disregarded by the Internal Revenue Service (IRS). This means that instead of the company filing taxes and taking deductions as an LLC, the company is disregarded for tax purposes and the profits and losses are passed through to the business’ individual shareholders or members.

Benefits of Forming a Disregarded Entity in New York

The benefits of forming a Disregarded Entity in New York are clear. For starters, it provides the company owner with limited liability if they are sued since the company is technically still an LLC. Disregarded Entities are also pass-through taxation entities, which means you can take the company’s profits and losses and pass them to the owner’s personal taxes, thereby avoiding double taxation. Additionally, forming a Disregarded Entity in New York gives the company owner more flexibility when it comes to taxation since they are able to choose which business expenses are deductible.

How to Get Started With a Disregarded Entity in New York

Getting started with a Disregarded Entity in New York is relatively straightforward. The first step is to file the relevant paperwork with the New York Department of Taxation and Finance along with any other necessary documents. This paperwork should include a statement of omission from the LLC and an operating agreement. Once the paperwork has been filed, you will need to designate a responsible party to oversee the LLC’s affairs. It is also important to remember that you must meet any annual requirements imposed by the Department of Taxation and Finance in order for the LLC to remain in good standing.

Finally, in order to ensure that you are in compliance with all relevant regulations, it is recommended that you consult a lawyer or other legal counsel experienced in Disregarded Entities in New York. There are many experienced attorneys who specialize in this area of law, and an experienced attorney can provide invaluable guidance and counsel throughout the formation process.


Disregarded Entity,


New York