What to Know When Creating an LLC in New York
Starting a business by forming an LLC can be a daunting task for any new business owner3 min read
Starting a business by forming an LLC can be a daunting task for any new business owner. Creating an LLC comes with a multitude of responsibilities, paperwork, and regulations that must be taken into consideration. Specifically in New York, there are certain laws and regulations that should be followed and kept in mind when forming an LLC. In this article, we will discuss the different procedures that should be taken when creating an LLC in New York and what should be expected from the process.
First, what is an LLC? LLC stands for Limited Liability Company, which is a legally recognized business structure that allows for the protection of the owner's personal assets from any liabilities or debts that the company experiences. LLCs can be formed by single owners or multiple owners, known as members. It’s important to note that an LLC is not a “corporation”, but a separate legal entity that is more flexible.
When beginning the process of creating an LLC in New York, the first step to take is to determine the name of the business. This should include words like “LLC”, “Ltd.” or “Limited” in the business name. Additionally, it is important to make sure that the name is not currently being used by another business. To do this, the business name should be checked on the New York Department of State’s website.
The next step is to choose and appoint a Registered Agent who will receive all of the legal documents for the LLC, such as an annual statement or tax documents. This role can be taken on by an individual or another company with a physical address in the state of New York.
After naming the business and selecting a Registered Agent, the next step is to file an “Articles of Organization” to the state of New York. This document is used to officially set up the LLC. Articles of Organization includes information such as the name and contact info of the LLC, the purpose of the business, and the name and address of the Registered Agent.
In addition, the LLC may need to register with the New York Department of Taxation and Finance. This is necessary to pay taxes, withhold employee wages, and collect federal and state taxes.
Once the Articles of Organization is approved, the next step is to create an Operating Agreement. This document outlines how the LLC will be managed, how decisions are made, and how profits and losses are distributed among the members. Operating Agreements are not required by the state but it is recommended for the protection of all members.
Finally, the LLC may need to apply for any necessary business permits and licenses such as a sales tax permit. This can be done through the New York State Department of Taxation and Finance.
There are many steps and procedures to follow when creating an LLC in New York. Choosing the right name, appointing a Registered Agent, filing the necessary paperwork, registering with the Department of Taxation and Finance, and obtaining the proper permits are all essential steps in the process. When done correctly, these steps will help ensure the success of the LLC. It is also important to keep in mind any additional federal filing requirements such as an Employer Identification Number, also known as an EIN.
For those looking for legal support from business lawyers, UpCounsel can provide experienced local legal counsel. Additionally, UpCounsel's attorney community can provide high quality, cost-effective legal services for businesses of all sizes.
Topics:
