NY LLC Formation: Everything You Need to Know
When considering an NY LLC formation, there are important aspects to consider. 3 min read
When considering an NY LLC formation, there are important aspects to consider. New York is a great place to start a business as it is known for its diverse culture and its strong industrial centers. The state is known as a hub for technology, finance, media entertainment, tourism, and investment.
With a domestic product in 2015 of $1.44 trillion, it ranks as one of the top 15 economies in the world. Starting your own business in New York is relatively easy, especially when forming a Limited Liability Company. Forming an LLC in New York will give you the advantages of limited liability without all the rules and regulations that large companies must follow.
Advantages of Forming an LLC in New York
There are many advantages to forming an LLC in New York. Some of the most common reasons business owners choose to form as an LLC include:
- A limited personal liability - An LLC protects the owners from having their personal assets used to settle debts or lawsuits that the business has associated with it.
- Fewer regulations - LLCs have fewer rules than corporations and offer little to no restrictions on ownership.
- Easier management structure - LLCs offer owners a lot of flexibility when it comes to the management structure of the company.
- Easier taxation - LLCs are pass-through tax entities which allow the profits and losses to pass through the company and be reported on the owner's individual tax return.
Steps for Forming an NY LLC
There are multiple steps to forming an LLC in the state of New York.
Step 1: Choose a Name
The first and probably most important steps to forming your LLC is choosing your LLC name. When creating your company name, you will need to:
- Make sure it suits your business venture
- Have it include Limited Liability Company, Limited Liability, or some abbreviation
- Not use prohibited or restricted words such as bank, attorney, university, or anything that would associate it with a government entity
- Make sure that it is distinguishable from any other business registered in the state
To make sure your business name is available you will want to search the database at the New York Department of State Division of Corporations. If your name is available, it is a good idea to reserve your business name until you file your LLC paperwork You can reserve your name by filling out an Application for Reservation of Name with the New York Department of State Division of Corporations. Send the form by mail along with the filing fee, and it will reserve your name for up to 60 days.
Step 2: Designate Your Registered Agent
If you do not name a registered agent, the New York Department of State will act as the default agent and will handle your formation documents and any legal paperwork you receive by forwarding it to your business principal. Since the state provides limited services, many businesses name their own registered agent. To qualify as a registered agent in the state, you will need to:
- Have a physical address where you can receive legal correspondence
- Be authorized to do business in the state
- Be available during regular business hours
- Have your name and address be a part of the LLCs public record
- Notify the state of any change of address
Step 3: Filing Your Articles of Organization
To form your LLC, you will need to file a DOC-1336with the New York Department of State. Your Articles of Organization will need to include:
- Your taxpayer identification number
- Your registered agent's address
- Your LLC name
- Your licenses and permits
- All of the members' signatures
Mail the form by along with the required $200 fee. Processing will take approximately three to four weeks. Filing your paperwork online for expedited processing is also an option.
Step 4: Publish Your LLC's Intent to Form
According to the Limited Liability Company Law Section 206, an LLC must notify the public of their intent to form an LLC. Publishing of the notice must occur within 120 days of the Articles of Organization being filed and be published in at least two newspapers for multiple weeks. Once publication requirements are complete, you will need to file a Certificate of Publication.
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