New York LLC – How To Start a New York LLC (7-Step Guide)

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When forming a business in New York, there are lots of decisions you will have to make. If you decide that an LLC is a right format for your business, there are a few steps that you are required to follow to ensure that it has been formed and processed correctly. All states have different requirements when it comes to LLC formation, and New York is no different. Be sure to check you have completed all steps for your required state when going through the formation process.

In this guide, we will be looking at the steps of how to create an LLC in the state of New York. Although this may seem a bit daunting at first, if you follow each step, the process may seem a little simpler.

Who Can Form an LLC in New York?

Before you do anything, you should first check that you are eligible to form an LLC in the state of New York. The requirements are pretty simple. The business owner needs to be either a New York State resident or the business must be located in New York. If you are able to meet either of these, you can create an LLC in New York.

There will be industry, licensing and zoning rules that you will need to follow in order to operate legally. Some of these will be specific to where you are forming your LLC or the type of LLC you are forming, for example, home-based businesses will require special permits. Make sure you do your research before forming your LLC and get any necessary licenses and permits, so there are not any problems later on.

8 Steps In Order to Start an LLC in New York

Step 1: Choose a New York Business Name

Choose-Your-Business-Name

The first step is arguably the simplest, you have to decide on a name for your LLC. There are certain guidelines that are outlined by the state of New York that your business name will have to meet in order to be accepted, however, you’ll still want to make sure that it relates to your business.

Your business name must include the term Limited Liability Company, although this can be abbreviated to LLC or L.L.C. it must also not contain any restricted words or phrases. These are words that are usually set aside for certain sectors, such as a doctor, but it is advisable that you check the full list of restricted words before coming to a final decision. It must also be completely unique from all the other business names in the state.

To find a name that has not been used before, you’ll have to check the Corporation and Business Entity Database of the state of New York. This is free to do, but if you do not feel comfortable doing it yourself, there are companies that will complete the search for you. If you want to officially check if your required name is still available, you’ll have to send a written request to the Department of State, which comes with a $5 fee. If your name is not available, you will have to submit the request again, along with another fee. If you want to, once you have found a name that is available, you are able to pay $20 to have it reserved for up to 60 days.

While you are in the process of picking a name, it may also be worth seeing if your desired URL is available. Even if you do not want to create a website right away, it might be worth buying to ensure you have your desired URL when you do decide to make a website.


Step 2: Register Official Address in NY and Registered Agent

The next step is to register the official address for your LLC. This is where all your official mail will be sent to. The New York Secretary of State serves as all New York LLCs registered agent, unless you decide to designate an additional registered agent, so when filling out your articles of organization, you will have to specify where you would like your official mail and service of process sent to. 

The Department of State offers limited services when compared with other, paid for registered agent services, so some businesses choose to use an additional registered agent to make use of these other services.


Step 3: Getting Licenses and Permits for NY

Business-Licenses-and-Research

There are a few licenses and permits you may need when processing an LLC in New York. These depend on the location of the LLC, as different areas require different permits. When setting up your LLC, you should check with your local small business office to learn more about what is needed.

In New York, there are over 30 professions that will require a professional license from the state and include, but are not limited to, security guards, healthcare professionals and real-estate brokers. An easy way to see if you will need an additional permit is to use the state’s Business Express Wizard, which will help you to check what licensing regulations directly impact your business.


Step 4: File Articles of Organization to the New York State

You will then need to file the Articles of Organization Form, also known as the DOS-1336 Form. This important document establishes your LLC as a separate legal entity and includes lots of information about your business.

Filling out the form should be pretty self-explanatory, but you need to make sure you include signatures of all the LLC members, provide the information to show that the LLC name meets all the state requirements, an address in the state which can be reached should a suit be filed against the company, plus all the necessary fees. You will also need to state whether you are planning on starting a member-managed LLC or a manager-managed LLC.

Submitting the form costs a fee of $200 which can be paid in cash, check, money order or card. You can choose to either fill it out online which is available from the Department of State, or if you prefer, you can download, print it out, and then fill it out by hand. If you are filling it out by hand, be sure to use a black pen and clean white paper, so that it can be filed correctly.


Step 5: Get an EIN for Your New York LLC

Employer-Identification-Number

The next stage is to get a New York LLC EIN, which stands for Employee Identification Number. This is something that you are able to do yourself, or alternatively, you can pay a company or individual to obtain it for you. This 9 digit number has several uses, such as being used to identify a business entity and to keep track of business tax reporting. You will need an EIN when you want to open a business bank account, and if and when you want to hire any employees.

If you do it yourself, it does not cost any money to get an EIN, and is obtained by the IRS by the person forming the company. Obtaining an EIN is the most effective method if you need the number quickly, as you will receive your number as soon as you have gone through the process. If you would prefer to have a copy of your EIN in paper form, then it is also possible to obtain it through the mail. Simply download the form, fill it in and then fax or mail it, however, if you do this, it can take around 4 weeks.


Step 6: Meet the New York Publication Requirement

New-York-Publication-

New York is one of the few states that require you to publish a notice of your LLC formation. You have to publish either a notice related to your LLC formation or a copy of your articles of organization in at least two newspapers, one of which is weekly and one of which is daily. This has to be done within 120 days of formation.

You can’t pick any newspaper you want, it has to be approved by the local county clerk of the county you designate in your Articles of Organization. Once you have filed your publication, you’ll need to file your Certificate of Publication, with the affidavit of publication which you will receive from the publisher or printer of the newspaper, to the New York Department of State. The filing of the Certificate of Publication requires a $50 fee.


Step 7: Create an Operating Agreement for your New York LLC

Operating-Agreement

Not all states require you to have an operating agreement, but in New York it is part of the LLC formation requirements. This could be either written or verbal.

What is an operating agreement?

This is a legal agreement that outlines the operating procedures and ownership of an LLC. By having an operating agreement, it may prevent conflict in the future, as all the owners of the business know where they stand, as everything is clear and outlined in the document. For example, if your LLC has more than one owner and gets dissolved, the operating agreement will show how all the assets will be distributed.

You can either create your own operating agreement if you feel comfortable doing so, or you can use one of the pre-made operating agreement templates that are available online, which may incur a small fee. Alternatively, if you are using an LLC formation service, depending on the package that you go with, some packages offer an LLC operating agreement, taking the stress off you. If you hire an attorney, they can either write your LLC for you, or look over it once you have completed it to make sure it includes all the necessary information.


Types of New York LLCs

A regular LLC is usually best for most LLCs in New York, but it is not the only option. In New York you are able to form a Professional LLC, which has specialized requirements and licensing. Only specific types of businesses are able to be a Professional LLC, which includes licensed physicians, attorneys, and councilors-at-law to name a few. The other type of LLC is Foreign LLCs, which can be used if your business is already operating in another state, and you are wanting to expand.

Other Important Things to Remember After Forming a New York LLC

Ongoing Commitments

Depending on the type of LLC you have and the type of taxation you opted for, you will have different tax responsibilities. If you are selling a physical product, you will likely have to register for a seller’s permit with the Sales Tax Certificate of Authority, allowing businesses to collect sales tax.

If the business has employees in New York, then it is required that you register for Unemployment Insurance Tax and Employee Withholding Tax. Then, if your business falls within different specific industries, you may be required to pay additional state taxes.

Unlike the majority of states, New York does not require its LLCs to file an annual report, however, depending on the circumstances, you may have to pay an annual fee.

File Your Biannual Statement to NY State

Although in the early stages of your LLC you won’t have to worry about it for a while, at the two year mark of your LLC formation, you will need to file your New York Biennial Statement. This is due at the end of the month that your LLC was formed, two years on. If you don’t file this report, then the result is your LLC falling out of good standing.

Get Business NY Insurance

Business insurance is an important part of running an LLC. By having the insurance in place, you will have peace of mind when it comes to managing risks. There are several different types of business insurance.

  • General liability insurance – This type of insurance is quite broad, but in general, it will protect your business from lawsuits. The majority of small businesses will get this type of insurance.
  • Professional liability insurance – This type of insurance is used by those in the professional service industry, such as accountants and consultants and covered malpractice and similar errors.
  • Workers’ compensation insurance – Workers’ compensation insurance covers injuries, death and job related illnesses for employees in a business. In New York, this sort of insurance is required by law if the business has more than one employee.

TOP-2 LLC Formation Services To Help With Your New York LLC

It is possible for you to form your LLC yourself, however, this can be quite time-consuming and may be quite confusing for some. It should be possible to work out yourself, however, if you want peace of mind that your LLC is going to be formed correctly, and give yourself more time to focus on your business, you can always hire a company to do the hard work for you. There are a huge number of LLC formation companies out there, but one of the best options is certainly Zenbusiness.

#1: Start a NY LLC With Zenbusiness

Zenbusiness makes legal filings easy and straightforward for small businesses, offering a wide range of other services in addition to business formation.

Pros

  • It offers businesses everything they need to get started and registered with New York or their respective state. The all-inclusive service is almost as quick and as straightforward as possible.
  • It is one of the cheapest currently on the market, with pricing starting at just $39, which is a good deal cheaper than most of its competitors.
  • The company offers its add ons in a tasteful way, and is not at all pushy when it comes to ad ons or upsells.
  • Zenbusiness have literally thousands of reviews online, the majority of which are positive, so you can rest assured that you will be getting great service.
  • The company have great customer service, and can be contacted in a number of ways. The team will be helpful and are eager to answer your questions.

Cons

  • Although the pricing is reasonable, it is not the cheapest LLC formation service in the industry.

$49

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Rating: 4.8/5
Review count: 4500+

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Form an LLC today with ZenBusiness for only $49. They Have 98% customer satisfaction rating and over 4500+ verified reviews.


#2: Start a NY LLC With IncAuthority

IncAuthority began its journey in 1989, and have grown to be one of the most popular LLC formation services, having helped form over 250,000 businesses.

Pros

  • IncAuthority is the cheapest LLC formation service, in fact, it is completely free to use, and you will only have to pay state filing fees.
  • The company has years of experience, so really know what they are talking about.
  • Although they are the cheapest LLC formation service, they still over a full year’s worth of registered agent service, no matter the LLC formation package you choose. This is a huge benefit, as this service can be quite expensive when purchased on its own.
  • No matter when you formed your business with IncAuthority, you will receive lifetime alerts, so you will never miss an approaching deadline for annual reports and business licenses etc.
  • The company offers good customer service, with the reps being friendly and knowledgeable before, during, and after the process.
  • There are over 15,000 customer reviews available to read online, the majority of which are positive.

Cons

  • The company have to make their money somehow,  and seeing as they don’t charge anything for their LLC formation, they have a lot of upsells. Some of the additional features may also come at a slightly higher price tag compared to some of its competitors.

$0+State Fees

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Rating: 4.8/5
Review count: 4500+

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Form an LLC today with IncAuthority starting at $0+state fees. They’re one of best-known services with lots of great customer experience.


FAQs About New York LLC Formation

How much does it cost to form an LLC in New York?

There are several costs associated with forming an LLC in New York. For a start, to file your Articles of Organization, the New York Department of State Division of Corporations charges a $200 fee. Then, if you decide you would like to reserve your LLC name so that it doesn’t get taken by anyone else, there is a $20, which has to be paid before filing your Articles of Organization. If you are going through the process yourself, these are the main fees you will have to pay, however, if you use an LLC formation service, you will have to pay them the cost of the package you choose. Another option is to hire a lawyer, although this is likely the most expensive option.

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About the Author
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Founder & author

Ian Broderick is an avid author and owner of LLCGuys.com. He's been involved with the LLC formation field for over 4 years. On top of that, he has worked in several well-known LLC formation service providers. Now he decided to share his knowledge and advice with everybody. Since there are a lot of questions and concerns surrounding this field - his aim is to make LLCGuys a top-notch information provider in regards to LLC creation, service reviews and etc..

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