How To Start An LLC In New York

Key Takeaways

LLCs are legal entities used in the ownership, management, and defense of enterprises in the United States. LLCs provide the same financial and legal protections as corporations, despite the fact that running them may be less complicated.

When you submit the Articles of Organization to the Secretary of State in New York, you will be required to pay a fee of two hundred dollars, which covers the cost of incorporating a limited liability company in the state.

The vast majority of limited liability companies (LLCs) adopt pass-through taxation, which requires members to reveal their portions of company revenues and losses on personal tax returns. This is the case because members are taxed on their individual income rather than their business income.

In addition to checking to see whether the name you want to use for the limited liability company (LLC) is available, you will also need to appoint or create a registered agent and a physical address for the company.

What is an LLC?

When launching a new company, founders must decide what legal form their enterprise will take. An LLC is the best business structure for organizations with several founders. Limited Liability Companies (LLCs) shield business owners' assets from corporate debts. Compared to corporations, LLCs have lower tax rates.

However, LLC formation is complicated due to variations in the required steps for creation, the fees associated with filing, and the ongoing legal obligations that arise. A limited liability company, or LLC, is a type of unincorporated business organization in which the corporation members share in the profits and losses but are protected from personal liability for the debts and other obligations of the company.

An LLC must comply with the rules outlined in the Limited Liability Company Act to be formed and to function. Any number of legitimate business goals can justify forming an LLC. The limited liability company (LLC) combines a corporation's liability protection with a partnership's operational freedom. Because of its flexible management structure, an LLC may be tailored to fit the specific requirements of its shareholders. In contrast to corporations, LLCs have "members" rather than "shareholders" or "partners" as their owners. Members can be either natural persons or other legal entities such as corporations, partnerships, or other limited liability companies.

What Procedures Must You Follow To Form An LLC In New York?

Step 1: Decide a Name for Your New York LLC

In New York, a limited liability company (LLC) is created by first giving it a legal name. Therefore, choosing a name for your company is an essential first step, and you should keep in mind that it should be short, catchy, and available in the state, as well as conform to all of the LLC's naming requirements.

LLC Naming Guidelines in New York

While coming up with a name for your New York limited liability company, you'll need to adhere to a few rules. The following are some of the most crucial prerequisites:

No other businesses in New York may use the same name, and you should be able to secure a trademark for your chosen name.
Any of the terms "Limited Liability Company," "LLC," or "LLC" must appear as a suffix on your company name.
You may only give your company a name that customers might understand. The Treasury, the State Department, the FBI, the CIA, etc., should not be mentioned.
Additional conditions by the New York State Government must be met before terms like "bank," "university," "attorney," "doctor," etc. may be added.

Step 2: Appoint a New York-Based Registered Agent

Appointing a registered agent is the second requirement for creating a New York limited liability company. Your limited liability company (LLC) must have a "registered agent," which can be an individual or corporation. To this New York address, you may send your tax returns, court papers, notices of lawsuits, and other official government mail.

As a result, you must ensure that your limited liability company has a reliable New York registered agent. Having a New York City street address or a New York City resident as your registered agent is required. Your limited liability company's primary address for service of process will be set as the address you provide. The benefits of a registered agent are often included in the cost of forming an LLC.

Applications for Authorization as a Registered Agent

The New York Secretary of State does not require a separate letter of approval. This letter of consent from the registered agent confirms that he agrees to serve as an agent for the service process. They can also file a Rejection of Appointment to decline the appointment. The new registered agent must sign the consent letter when the registered agent (or name or address) is changed. It's included with the paperwork needed to switch registered agents. A $30 filing fee must be paid.

Step 3: File Your Articles of Organization in New York

The third and most important stage in establishing a limited liability company is filing the articles of organization. The New York Articles of Organization is a legal document that must be submitted to the New York Secretary of State in order for your firm to be officially recognized. The filing fee for your formation certificate in the state of New York is currently set at $200. (either by mail or electronically). The company's name, registration agent, employees, and organizational structure are all listed in the company's articles of formation (member-managed or manager-managed). Before making any decisions regarding employment in a New York limited liability company (LLC), one must become well-versed in the applicable laws. For instance, if you already run a successful business (an LLC) in another state and want to expand operations into New York, you must register as a New York Foreign LLC.

Step 4: Fulfill Publication Requirements for a New York LLC

Each member of an LLC in New York must pay the state's required filing costs to set up shop. In addition to being mandatory, this charge may be deducted from your taxable income. Self-filing does not incur any additional costs because you are doing everything yourself. However, DIY methods may be time-consuming, frustrating, and unpleasant, especially for inexperienced business owners. As a result, consulting an expert is crucial if you want to set up an LLC in the Empire State.

Step 5: Make An Operating Agreement For Your LLC In New York

An operating agreement is a private contract between business partners that specifies the legal framework within which your limited liability company (LLC) will function. For future peace and harmony, all business owners must be on the same page about the company's operations, and this paper serves that purpose well. You must have a comprehensive operating agreement to file a New York LLC with the state. Before, at the time of, or no later than ninety days after filing the articles of formation, an operating agreement must be drafted. If you ever decide to dissolve the New York LLC, this paperwork will come in handy.

Step 6: Filing a New York LLC EIN

The Internal Revenue Service (IRS) assigns businesses a unique nine-digit number known as an Employer Identification Number (EIN) for filing taxes and other government-issued forms. For any operational business, the EIN is required. When an LLC starts hiring staff, an EIN becomes mandatory. Some laws and regulations must be followed while hiring personnel in New York, LLC. However, if your LLC is located in a different state, you must apply for a New York international LLC EIN.

One must apply to the IRS for an EIN (also known as a FEIN) by submitting a form (either electronically or by regular mail). Please complete the form to the best of your ability and return it to the address listed. Alternatively, you may hire a third-party service to help you apply for an EIN.

Mail to: Internal Revenue Service, Attn: EIN Operation, Cincinnati, OH 45999

What Should You Do After Starting Your New York LLC?

Following the formation of a limited liability company (LLC), you will still need to fulfill specific criteria. Keeping personal and corporate funds distinct is the need that takes precedence above all others. For this reason, limited liability companies (LLCs) are often utilized so that their owners' assets are shielded from the obligations of their businesses. This is referred to as the "corporate veil," yet it can be penetrated if the LLC is sued.

When this occurs, members of the LLC are personally responsible for paying any obligations incurred by the business. To avoid a "piercing of the corporate veil," it is necessary for a limited liability company (LLC) to have a current registered agent and sufficient capital and to submit all the required documents to the state.

Apart from that, there are a few things you need to take note of:

Obtain a business checking account, a business credit card, and any other financial instruments your firm may need. After forming a firm, it is essential to have appropriate business accounting tools, even if your company has a less formal organizational structure.
Complete the necessary paperwork to open a business in New York. In addition, before you apply for the required permits, ensure you know exactly what they entail. Having the proper licensing is essential to operate a lawful enterprise.
Invest in employee coverage for both general and professional liability insurance. Even if your company is relatively straightforward, you still have a responsibility to safeguard your workers.
File an annual or biannual report for your New York LLC.

FAQs

Does an LLC need authorizations and licenses?

State and municipal governments, or sometimes both, provide licenses and permits for specific commercial operations. New York Business Express can help you determine if your company needs any licenses or permits from the state of New York.

Must I get a lawyer?

The rights and obligations established in an organization's Articles of Organization and Operating Agreement are enforceable in court. Therefore, those who plan to develop a limited liability company should seek legal counsel. Although having legal representation is recommended, it is not necessary to incorporate an LLC.

How Long Does It Take To Form A New York LLC?

The time required to form a New York limited liability company varies. If you apply for a New York Limited Liability Company online, you'll have one in no time (immediately). It takes three to five business days to receive an LLC if you file paperwork via mail. It might take less time if you choose an established LLC service.

Conclusion

Forming a limited liability company (LLC), often known as a "simplified corporation," is more straightforward than forming other forms of organizations. Creating a limited liability corporation (LLC) in New York is a specific procedure that can be finished in a short period of time for a minimal charge and a relatively short amount. A benefit that may be achieved by creating an LLC is known as "pass-through taxation," which exempts LLCs from paying certain taxes. This advantage can be obtained by founding an LLC. The most remarkable aspect is that a drastically decreased quantity of paperwork and other procedures are needed to form a limited liability corporation. This is one of the prerequisites.

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