Form LLC in New York: Everything You Need to Know
The process of meeting the requirements (not including publication timelines) for New York LLC formation can take about 6-7 weeks. Here are the steps to do it:8 min read
2. File Your Articles of Organization
3. Assign a Registered Agent
4. Write an Operating Agreement
5. Publish Notices Regarding Your LLC
6. Get an Employer Identification Number from the IRS
7. Obtain Any Licenses You Need
8. Register for any state taxes which may apply
9. Understanding Your Yearly Filing Fee
11. Professional Service Limited Liability Companies
12. Foreign Limited Liability Companies & Foreign Professional Limited Liability Companies
The process of meeting the requirements (not including publication timelines) for New York LLC formation can take about 6-7 weeks. Partnerships or limited partnerships can be converted into LLCs by filing a Certificate of Conversion with a fee of $200 with the New York Department of State. Limited liability companies can be merged or consolidated with other limited liability companies and/or businesses – a Certificate of Merger and fee of $60 should be filed with the New York Department of State.
Naming your business
To set up an LLC in New York, you must start with naming your business. To see if your chosen name is available, you should check with the New York State Division of Corporations. The name must contain "LLC", "L.L.C." or "Limited Liability Company", and be distinguishable from other LLC’s corporations or limited partnerships on file. You must also ensure that your name does not contain Prohibited words (words that would confuse the name of your LLC with a federal or state agency like FBI), and that if you have Restricted words in your name, that you file the required paperwork to get use of those words approved. Whatever name you choose, the name is not considered final until the Articles of Organization are reviewed and filed by the Department of State.
You may also want to make sure that an appropriate URL for your business is available to establish a website.
You can reserve your chosen name for use at a later date (for sixty days) by filing an “Application for Reservation of Name.” You can extend this reservation twice for 60 days each, but must submit your request in writing. Both the initial application and the extensions each cost $20. You must include your receipt (Certificate of Reservation) whenever you send in requests to extend or apply for reservation of a name.
In some cases, LLCs may be required to conduct business in New York under an assumed name. This can be done by filing the Certificate of Assumed Name with the fee of $25. This Certificate can later be amended to reflect changes in true names, amendment of assumed name and adding/deleting addresses of business locations. The Certificate of Amendment of Certificate of Assumed Name Form should be filed along with the $25 fee. The assumed name can also be discontinued by filing a Certificate of Discontinuance of Assumed Name with a fee of $25.
File Your Articles of Organization
You must file Articles of Organization to create your LLC (see section 203 of NY State Limited Liability Company Law). These must be filed with the State Division of Corporations. In the articles, you must include the full name of your LLC and the county in which your business will be located. A mailing address within the state of New York is necessary, where the Secretary of State can mail your business legal documents. You can file the articles by mail, or by filling online. The current fee is $200.
These articles can be changed from time to time to: change the name and address of designated address for service of process; change county location; or make, revoke or change the designation of a registered agent. These changes can be done by filing a Certificate of Change along with a $30 fee.
Assign a Registered Agent
The registered agent of your LLC is the person who will receive legal papers from the Secretary of State. If you are sued, the named individual is responsible for accepting all paperwork pertaining to the lawsuit on behalf of the LLC. In New York the Secretary of State is the default registered agent, but you can change this once your LLC is formed by filing a Certificate of Change of Registered Agent along with a $30 fee. The registered agent must be a NY resident or corporation authorized to conduct business in New York.
The agent for service of process may change his/her on-file address by filing a Certificate of Change along with a $ 5 fee. The agent may also resign by filing a Certificate of Resignation of Registered Agent, along with a $20 fee.
Write an Operating Agreement
You must write an operating agreement within 90 days of filing your Articles of Organization, but an operating agreement can be entered into before or at the time of filing the Articles of Organization. This document is used to establish the rights and responsibilities of all of the members of the LLC. It is an internal document, and one in which all liabilities and powers are specified for every member. New York State Law doesn't specify any consequences for not adopting an Operating Agreement, however they are considered mandatory for all LLCs in New York State. This document allows your LLC to function in an organized, clear way.
Publish Notices Regarding Your LLC
You have 120 days from the time your articles of organization are effective to publish that your LLC has been established in two newspapers for six consecutive weeks. The articles of organization can be published for this purpose or a notice related to the formation of the LLC. Check with the county clerk in the county where your business is established to determine what two newspapers will be sufficient. Once both newspapers have published, you will need to file a Certificate of Publication with the New York Department of State, Division of Corporations, along with affidavits from both newspapers. This paperwork must be filed with the Division of Corporations. The fee for filing a certificate of publication is $50. If you don’t publish and file the Certificate of Publication within 120 days, it could lead to the suspension of the LLC’s authority to conduct business.
Get an Employer Identification Number from the IRS
If your LLC contains more than one person, you need a federal EIN number from the IRS, which you can apply for either online or by mail. This number identifies your LLC to the government for tax purposes. You do not have to pay to get an EIN for your LLC, but it allows you to open a business bank account, is used for both federal and state tax purposes, and allows you to hire employees.
Obtain Any Licenses You Need
Find out what licenses or permits you need to run your LLC by contacting your local county clerk's office. You should also check in with the New York Business Permits Assistance Program to see if you need any statewide licenses or permits.
Register for any state taxes which may apply
If you have hired employees in New York, you’ll need to register for state payroll taxes including Unemployment insurance tax and state income tax withholding. You can register for these taxes by filing form NYS100. If you are selling a product in New York you will also need to register for NY sales tax by obtaining a New York Certificate of Authority. Check here to find out about any other taxes/reporting requirements which you may have.
Understanding Your Yearly Filing Fee
If your LLC is a partnership or disregarded entity when it comes to paying federal income taxes, and your business has income, gains, losses or deductions that come from sources in New York, you must pay a yearly filing fee. This fee is based on LLC income and is due 60 days after the last day of an LLC’s tax year. If your LLC is set up as a corporation for tax purposes, no yearly filing fee is assessed. To pay your filling fee, you will need to complete FORM IT-2040LL and send it in to the Department of Taxation and Finance.
You do not need to file a yearly report for your LLC when it is based in the state of New York.
New York Law does not require that you hire a lawyer to ensure your LLC is set up correctly, but it is recommended.
LLCs are, however, required to file a Biennial statement to update their contact information with the New York Department of State every two years. This report is due by the end of the month in which the LLC was formed, every two years. There is a $9 filing fee. You could be charged up to $250 in late fees if you miss your filing deadline and be classified as delinquent. This classification could lead to your LLC being dissolved or revoked.
New York also requires certain documents to be kept at an LLC’s principal place of business. The list can be found in Article 11 of the New York Limited Liability Company Law.
For tax purposes, federal tax regulations allow an LLC to choose whether it wants to be taxed as a corporation or partnership for income tax purposes.
Within 90 days post-dissolution or when there are no members, a company can file Articles of Dissolution along with $60 fee.
Professional Service Limited Liability Companies
These may be formed by filing Articles of Incorporation, along with a Certificate of Good Standing or Certificate of Authority and the $200 filing fee with the New York Department of State. A list of “professional services” can be found here. Publication in two designated newspapers must also be completed, and the Certificate of Publication along with the affidavits of publication of the newspapers must be submitted to the New York Department of State with a $50 filing fee.
Foreign Limited Liability Companies & Foreign Professional Limited Liability Companies
If you are expanding an already existing LLC to the State of New York, you are forming a foreign LLC. If you are a foreign LLC wanting to do business in the State of New York, you must file an Application for Authority. This application must include a Certificate of Existence (dated within one year) from the person who files and maintains limited liability company records in the company’s home jurisdiction (usually the Secretary of State), and a filing fee of $250,
The name of the company must comply with State statutes and/or may be allowed only with the consent or approval from another state agency in the case of certain words or phrases. This application must be filed with the New York Department of State.
The process is the same for foreign professional service limited liability companies, except that a Certificate of Good Standing or of Authority is required, and the filing fee is $200. Both foreign limited liability companies and foreign professional services limited liability companies are required to publish in 2 designated newspapers within 120 days of filing, and must obtain Certificates and Affidavits of Publication and file them with the New York Department of State. The filing fee is $50.
Amendments can be made to Applications for Authority for provisions lawfully contained within the application by filing a Certificate of Amendment, along with a $60 fee. The Application for Authority can also be changed from time to time to: change the name and address of designated address for service of process; change county location; or make, revoke or change the designation of a registered agent. These changes can be done by filing a Certificate of Change along with a $30 fee. The agent for service of process may change his on-file address by filing a Certificate of Change along with a $ 5 fee. The agent may also resign by filing a Certificate of Resignation of Registered Agent, along with a $20 fee.
For both domestic and foreign LLCs the party whose post office address has been designated for service of process can resign, but the party must provide the LLC with 60-days’ notice, after which the addressee can file a Certificate of Resignation for Receipt of Process, along with a $10 fee.
Any certificate or other instrument for both domestic and foreign LLCs can be corrected because of informality or error apparent on the face, incorrect statement of defect in execution by filing a Certificate of Correction with a $60 fee.
Foreign LLCs can surrender authority to conduct business in New York State (while remaining in existence in home state) by filing a Certificate of Surrender of Authority along with a $60 fee. If the company is being dissolved, merged out of existence or had authority to conduct business terminated or canceled in home jurisdiction, the company shall file a Certificate of Termination of Existence. This certificate, including termination statement, under Seal of Secretary of State or equivalent in home jurisdiction must be submitted (certified copy not enough), along with fee of $60, enclosed in white cover sheet with the title of the document and the name and address of person to whom receipt will be mailed.