New York LLC Law: Everything You Need to Know
You will file your articles of organization with the New York Department of State. 4 min read
2. Articles of Organization
3. Operating Agreement
4. Tax Law
5. Post Registration
New York LLC Law
Under New York LLC law, you need to file an articles of organization, choose a registered agent, and pay any fees associated with your LLC registration. The two most important documents to keep in mind are your articles of organization, which create your LLC, and the operating agreement, a document that defines the internal operations of the business.
Articles of Organization
You will file your articles of organization with the New York Department of State. To fulfill the minimal amount of information under New York law, your articles of organization should include the following:
- LLC Name
- County where Business Resides
- Registered Agent Appointee
- Business Address
If any member wishes to change the LLC name, or any other information in the articles of organization, you must file an amendment to the one you filed with the department of state.
An operating agreement is required under New York LLC law, and it should be filed within 90 days of the date you filed the articles of organization.
With that, the operating agreement is kept private and functions as a primary document that establishes the rules and governing structure of your LLC.
A sound operating agreement should have such information as:
- Payment System and Percentage Share of Each Member
- Rights and Duties of Each Member
- Managerial Duties Extending Employees
New York authorities give LLC members flexibility when it comes to what can be included in an operating agreement. Even though operating agreements are mandatory, New York law does not specify the consequences if an operating agreement is not drafted and submitted to the department of state.
With that, New York courts will refer to default guidelines established as a reference point if members take one another to court. Because of this, the courts may render a decision that disappoints all members.
Under federal law, LLCs are not considered a business entity when it comes to tax purposes. The LLC must file in the following forms:
- Partnership or Sole-Proprietorship
To comply with IRS guidelines, LLC owners must obtain a federal tax ID number from the IRS. You can get an ID for free by going to the IRS website and registering for one. It should be noted that New York law levies additional taxes on LLCs that need to file a New York state partnership return.
With that, partnership filing depends on the following factors:
- Business Operations
- Sales Tax or Withholding Tax Remittances
Overall, an LLC must pay dues based on the number of LLC members multiplied by $50. Further, the LLC must be a minimum $315 tax and a maximum of $10,000. In addition, LLCs must pay an annual fee of $100 multiplied by the number of members to keep the LLC in good-standing. Under annual dues, LLCs must be a minimum of $500 and a maximum of $25,000.
After your articles of organization is filed, you should contact the County of Clerk of your respective county and give officials the filing receipt. The easiest method is through mail. Within 120 days, you must publish your new LLC in two local newspapers once a week for six weeks straight. Further, you must publish the LLC debut in two newspapers of the county where the business resides, and you must print a weekly edition in one newspaper and a daily addition in the second newspaper.
This is a requirement going back to days when LLCs had to publish news of their LLCs in local newspapers to let the public know about a new business.
Despite protests from lawyers and businessmen, the law still remains in effect in New York.
Once the Clerk receives your receipt, you will be assigned two newspapers where you need to publish news of your LLC. You must arrange for the publication with the local newspaper and pay the necessary publishing fees. Failure to publish your LLC could result in the following penalties:
- Loss of Right to Sue in New York
- Will Not Be Able to Obtain a Certificate of Good Standing
- Denial to Conduct Business in New York
After you fulfill the publishing process, the newspapers will send an “affidavit of publication,” which you will file with the department of state. The filing fee for the affidavit is $50. You must also file your certificate of publication. The overall costs for publication process can range from $600 to $1200, depending on the county where the LLC is located and the publishing costs that newspapers charge.
To find out more about New York LLC law, submit your legal inquiry to the UpCounsel marketplace. One of our experienced attorneys will guide you through the legal process in forming an LLC, including the ins and outs of newspaper publishing and the best way to handle tax matters. Regardless of your inquiry, we can get you on the best course that will help your business thrive.