What to Consider When Forming an LLC in New York
One of the biggest and most important decisions a business owner can make is how to legally organize their business2 min read
One of the biggest and most important decisions a business owner can make is how to legally organize their business. In the United States, one of the most predominant ways to structure a business is by forming a Limited Liability Company (LLC). The LLC is an attractive option for many entrepreneurs and small business owners due to its flexibility and protections it offers its owners. For entrepreneurs based in the state of New York, here are the five key things to consider before forming an LLC.
When it comes to forming an LLC in the state of New York, there are numerous considerations and legalities that must be taken into account. The process of properly setting up an LLC can be complex, however, with the right legal counsel it is achievable. Below are the top five things to consider when forming an LLC in New York.
1. Business Name: The name of the LLC is the first step in setting up the company. The name of the LLC must also be distinguishable from any other name that is registered with the state of New York. If the LLC will operate outside the state of New York, there may be additional requirements to register the LLC with other states.
2. Registered Agent: Every LLC must appoint a person or entity who will serve as its “Registered Agent” in New York. This Registered Agent will be the recipient of service of process in the event of a lawsuit being filed against the LLC.
3. Operating Agreement: An Operating Agreement is a document which governs the LLC's operations and provides rules which the LLC must abide by. The Operating Agreement is typically comprised of articles regarding management and ownership of the LLC, taxation of the LLC, and any other necessary provisions and upon formation of the LLC, the Operating Agreement should be promptly put in writing.
4. Taxes: Every LLC in New York must file the proper paperwork with the New York Department of Taxation and Finance in order to register the LLC as a taxpayer in New York. It is crucial to be aware of all filing deadlines and payment requirements in order to protect the company from the potential of incurring late penalties and other fines.
5. Business Licenses: Depending on the type of business the LLC is doing (e.g. retail or service-based) the LLC may be required to obtain an official business permit or license from the state. These permits can usually be obtained through the New York Business Express website. Additionally, there may be other permits, such as an environmental permit and a zoning permit, that need to be obtained in order to conduct business in the state.
For entrepreneurs in the state of New York, forming an LLC is a crucial and often complex decision. However, with the right legal advice, and an understanding of the key considerations, it is possible to form a successful LLC that will best suit the needs of the owner or owners. UpCounsel has a variety of experienced attorneys who can provide customized legal support in setting up an LLC in New York, so if you have any questions or need assistance, they are ready to help.