Key Takeaways

  • A NY State LLC combines the liability protection of a corporation with the flexibility of a partnership.
  • The formation process includes filing Articles of Organization, meeting naming and publication requirements, and obtaining an EIN.
  • LLCs must comply with New York tax laws, including potential filing of the Partnership Return (IT-204) or Corporate Franchise Tax Return.
  • The Certificate of Publication is a unique NY requirement that must be completed within 120 days.
  • Additional steps such as drafting an Operating Agreement, understanding annual filing fees, and obtaining local business licenses are essential for compliance.
  • An attorney from UpCounsel can help ensure your LLC meets all New York legal requirements.

Starting an LLC in New York

A NY state LLC is a limited liability company that provides a flexible small business structure. An LLC can be owned by individuals and/or corporations, including other LLCs, and can have any number of owners (called members). This business entity combines elements of a corporation and those of a limited liability partnership.

Your LLC will need a registered agent who is designated to receive legal papers on the company's behalf. If you do not designate a residence or business address in New York for your registered agent, the state of New York will serve in this role by default. However, you'll still need to provide a physical address in the state.

Check with your county clerk office to find out about the licenses and permits you need to operate a business in your municipality. You can also consult an online business licensing service or the local chapter of the U.S. Small Business Administration.

You may need to request an EIN (employer identification number) from the IRS. This is required if your LLC has more than two members. Familiarize yourself with New York's obligations for LLCs, as these vary by state. In New York, an LLC can be taxed as either a limited liability partnership (LLP) or corporation and must pay New York Personal Income and Corporate Franchise Tax. 

Those who opt for LLP classification must file the Partnership Return Form (IT-204) with the Department of Finance. LLCs that opt for corporate taxation must file a New York State Corporate Franchise Tax Return. If the LLC is treated as a sole proprietorship, the owners report income and losses on their individual tax returns. Some LLC members may be required to pay estimated income tax or a filing fee.

LLC Formation Requirements and Costs in New York

Forming a NY State LLC involves several steps and fees. The filing fee for Articles of Organization is $200, and publication can cost from $300 to $1,600, depending on the county. You’ll also need to obtain an Employer Identification Number (EIN) from the IRS, which is free.

The New York State Department of State, Division of Corporations oversees LLC filings. Online filing is available for faster processing. Once approved, you’ll receive a Filing Receipt, confirming the LLC’s official formation date.

Additionally, LLCs must comply with state tax obligations, including the annual filing fee, which ranges from $25 to $4,500, based on gross income. Businesses also must pay applicable sales taxes and employment taxes, depending on operations.

Naming Requirements

New York has strict naming requirements for LLCs, including distinguishability from other business names, approval from state agencies, and the inclusion of specific words or abbreviations. LLC names must include the abbreviations L.L.C. or LLC or the words Limited Liability Company. 

You cannot use certain words such as university, attorney, or bank without the involvement of a licensed professional and/or additional approvals. Your LLC name may not include words that may cause confusion with a state or federal agency. Before filing your formation documents, consider checking your preferred name for availability. You may also want to reserve the domain name for your LLC.

New York LLC Operating Agreement

A written Operating Agreement is required for every NY State LLC under Section 417 of the New York Limited Liability Company Law. This agreement outlines each member’s rights, responsibilities, and profit distribution. It must be adopted within 90 days of filing the Articles of Organization.

Although you don’t file the Operating Agreement with the state, it serves as a critical internal document that governs management and financial arrangements. It should include:

  • Ownership percentages and capital contributions
  • Member voting rights
  • Management structure (member-managed or manager-managed)
  • Profit/loss allocation
  • Procedures for adding or removing members

Maintaining a comprehensive Operating Agreement can help prevent future disputes and clarify financial obligations.

Application for Reservation of Name

To reserve an LLC name in New York, an individual or existing company may file the Application for Reservation of Name, which is valid for 60 days. Forward the application along with a $20 filing fee to the New York Division of Corporations, One Commerce Plaza, 99 Washington Avenue, Albany, NY 12231. You'll receive a Certificate of Reservation which you must then file with your Articles of Organization. You can receive two 60-day extensions by filing an Extension for Application of Reservation of Name, which also carries a $20 fee.

Articles of Organization

An LLC must file Articles of Organization to register in the state of New York. The state has designed these forms to be as easy as possible to file. The document must include:

  • A New York address where members can be reached in the event of a lawsuit
  • Signatures of all the LLC owners
  • An approved name for the LLC
  • Filing fee of $200

To form a professional services LLC, such as a medical or legal practice, you'll need to provide a notarized Certificate of Good Standing or Certificate of Authority from the New York Division of Professional Licensing Services along with the Articles.

Articles of Organization should be mailed to the Division of Corporations at the address listed above. The process of forming a New York LLC takes about six to seven weeks from start to finish, including processing time.

Publication Requirements and Certificate of Publication

The publication rule is one of the most distinctive aspects of forming a NY State LLC. Within 120 days after formation, the LLC must publish a notice in two newspapers (one daily, one weekly) designated by the county clerk where the LLC’s office is located. The notice must run for six consecutive weeks.

After completion, each newspaper provides an Affidavit of Publication, which must be filed with a Certificate of Publication and a $50 filing fee to the Department of State. Failure to comply will result in your LLC being suspended from conducting business in New York, although it still exists legally.

Certificate of Publication

Within 120 days after filing the Articles of Organization for an LLC, you must publish the Articles in two local newspapers as decided by the office of the county clerk. This must be done for six consecutive weeks under the same business entity name stated in the LLC formation articles.

Post-Formation Obligations and Compliance

Once your NY State LLC is formed and published, ongoing compliance is required:

  • Biennial Statement: Every LLC must file a Biennial Statement with the Department of State every two years, due by the end of the calendar month in which the LLC was formed. The filing fee is $9.
  • Annual Taxes and Fees: LLCs taxed as partnerships must pay the annual filing fee based on gross income, while corporations pay the corporate franchise tax.
  • Business Licenses and Permits: Depending on your business type and location, you may need local permits or industry-specific licenses.
  • Recordkeeping: Maintain financial and membership records for legal and tax purposes.

Failure to meet these obligations can lead to penalties, loss of good standing, or administrative dissolution.

Advantages of Forming a NY State LLC

Creating a NY State LLC provides several benefits for small businesses and entrepreneurs:

  • Limited Liability Protection: Members are not personally liable for business debts.
  • Flexible Taxation: LLCs can choose to be taxed as a sole proprietorship, partnership, S-Corp, or C-Corp.
  • Management Flexibility: LLCs can be member-managed or manager-managed.
  • Ease of Formation: Minimal paperwork and fewer formalities than corporations.
  • Business Credibility: Registering your LLC increases trust with clients, lenders, and suppliers.

However, New York’s publication requirement and fees make it more expensive to form an LLC here than in other states.

Frequently Asked Questions

  1. How long does it take to form a NY State LLC?
    Processing typically takes 7 to 10 business days, though expedited service is available for an additional fee.
  2. What is the cost of forming a New York LLC?
    Expect to pay at least $200 for filing and $300–$1,600 for publication, depending on your county.
  3. Do I need an attorney to form a NY State LLC?
    You can file on your own, but an attorney can help ensure compliance with tax, publication, and operating agreement laws.
  4. Can a non-resident form a New York LLC?
    Yes. Non-residents can form and own a NY LLC as long as the company maintains a registered agent or physical address in New York.
  5. What taxes apply to NY LLCs?
    LLCs may be subject to state income tax, corporate franchise tax, and annual filing fees based on income levels.

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