Start An LLC In New York
Setting up an LLC (Limited Liability Company) in New York is very easy for prospective business owners in The Big Apple.
Filing the Articles of Organization with the New York Department of State Division of Corporation is basically the only document needed for creating an LLC in New York.
Below we will go into more detail about forming an LLC, New York-based, so be sure to continue reading.
But first, let’s see how New York compares to its neighboring states as a place to form an LLC.
| State | New York | Pennsylvania | Massachusetts | Connecticut | US Average |
|---|---|---|---|---|---|
| Population | 19,835,913 | 12,964,056 | 6,984,723 | 3,605,944 | 6,619,825 |
| LLC Filing Fee | $200 | $125 | $500 | $120 | $130.38 |
| LLC Annual/Biennial Fee | $9 (every 2 years) | $70 (every 10 years) | $500 (every year) | $80 (every year) | $89.34 (every year) |
| Corporate Tax Rate | 6.50-7.25% | 9.99% | 8.00% | 7.50% | 5.60% |
| Nominal GDP per capita | $93,463 | $64,751 | $91,129 | $82,233 | $64, 773.08 |
Before You Set Up An LLC In New York
To be able to call yourself an LLC owner in New York, there are several steps to consider, like choosing a name for the company and appointing a licensed professional to handle the legal paperwork, among other aspects.
How Much To Start An LLC In New York?
Forming an LLC in New York costs $200, and it is done by filing the Articles of Organization document with the New York Department of State Division of Corporation.
Although the cost is not as low as in other states, the fact that there are no other fees to be paid makes considering New York as the place of business for your LLC a good idea.
However, if you want to reserve a name for the LLC, an extra $20 is required.
For those wondering how to start an LLC in New York for free, there isn’t such an option – compulsory fees have to be submitted.
Steps To Start An LLC In New York
Before you can start an LLC in New York, there are a few steps you need to take. Here are some you need to follow to get started.
Pick A Name For Your LLC
Choosing a name is the first thing to do for starting an LLC in New York and is also one of the most important steps to take. The name you choose has to comply with the regulations imposed by the New York Senate, such as:
- Containing the phrase “limited liability company,” or one of the abbreviations – LLC or L.L.C.;
- Choosing a name that won’t include any government-related words like “FBI”, “Treasury”, or “State Department”, for example.
When you have decided on a name for your LLC, it’s also very important to remember to mind the following requirements:
- Implementing words like “Attorney”, “Bank”, or “University” will require licensed professionals like lawyers or professors to be actually part of your LLC, and additional documents can be required;
- Separating your LLC from any other limited liability company in New York;
- Reserving a name by filing the Application for Reservation of Name with the New York Department of State, Division of Corporations.
If you choose to reserve your New York LLC name, you can begin the process online or by mail and submit a statutory filing fee of $20.
Another helpful consideration when starting an LLC in New York is to check for URL availability – this means establishing an online presence for your company and eventually reaching a wider clientele.
Find A Registered Agent In New York
Unlike in other US states, The Big Apple plays by different rules when it comes to forming an LLC in New York. Namely, the Secretary of State is the default registered agent for every LLC in New York, yet, you are allowed to hire someone to act on your behalf legally.
Nonetheless, if you choose a registered agent yourself, the Secretary of State still remains the go-to point for all legal matters between you and the state.
The Secretary of State, aka the registered agent, will be the legal entity that delivers the following paperwork to your LLC’s address or the address of the registered agent you have chosen:
- All paperwork regarding the formation of the LLC;
- Any service of process information;
- and taxation and reporting documents.
You or one of your employees can also be a registered agent, and to be able to handle legal LLC paperwork in New York, the following requirement must be met:
- Be a New York resident;
- Be present on-site during business days and working hours;
- Deliver registered agent services.
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Do You Need A Registered Agent In New York?
Yes, creating an LLC in New York requires the presence of a registered agent. Although the Secretary of State acts as the first point of contact between you and the state, a prospective LLC owner can appoint their own agent to handle legal matters.
Articles Of Organization
Starting an LLC in New York requires you to file a document titled Articles of Organization – Form DOS 1336 with the New York Department of State Division of Corporations. You can file the form online or by mail, along with a nonrefundable state filing fee of $200.
The Article of Organization has to incorporate the following information:
- The name of your LLC;
- The county in New York where your LLC will be located;
- A New York address for the Secretary of State to forward legal documents to the LLC;
- The LLC’s organizer signature;
- And the contact information and signature of the person filing the document.
Once you have filed the Articles of Organization, the Secretary of State will review the application. If everything is in order, you’ll receive a confirmation that you have successfully formed a business entity in New York.
Other Required Documents
Besides the Articles of Organization – Form DOS 1336, if you are already an LLC owner elsewhere but are looking to expand to New York, then you must file a Foreign LLC form along with a $250 nonrefundable fee with the Department of State Division of Corporations, in-person, or online.
Other than that, the state of New York imposes publication requirements for forming an LLC. Namely, within 120 days of establishment, LLCs are required to publish a notice of LLC formation in two newspapers (one daily and one weekly) in the county where the LLC is located for the duration of 6 consecutive weeks.
Moreover, the newspapers must be pre-approved by the local county clerk of the New York county you have included in the Articles of Organization.
Once published, the publisher will issue an affidavit of publication. After publication, the affidavit and the New York Certificate of Publication form should be submitted to the New York Department of State, Division of Corporations, along with a $50 filing fee.
Operating Agreement
Forming an LLC in New York means that the State of New York will require all LLC owners to devise an operating agreement.
New York City instructs LLCs to compile an agreement within 90 days of filing the Articles of Organization, including the following details:
- The name and address of the LLC;
- How long will the LLC be operating;
- Contact details of the registered agent;
- Details about the Articles of Organization;
- The purpose of the LLC;
- How many members does the LLC have, and what are their contributions;
- Protocols for the dispersion of losses and profits;
- Onboarding and exiting protocols;
- Management details;
- and liability and indemnification clauses.
Get An EIN
For an LLC to operate in New York, obtaining an EIN, also known as FEIN/FTIN, is crucial – a business can not function without it. You can think of the EIN as the social security number of your company.
The IRS assigns a nine-digit number that serves as an Employer Identification Number (EIN). To get this, you can apply online or by downloading the SS-4 form and sending it by mail, with no fee required.
The EIN allows for the following matters:
- Filing and managing state and federal taxes;
- Opening a business bank account;
- and hiring employees.
The Forms You Need To Register An LLC In New York
To register your LLC in New York, you need to file the Articles of Organization Form DOS 1336 with the New York Department of State, either online, by mail, or in person. A fee of $ 200 is required.
Did You Know?
The state of New York is one of the rare places that require prospective LLCs to fulfill publishing requirements; businesses that would fail to do so would face penalties.
LLC Taxes In New York
How Much Do LLCs Have To Pay In Taxes In New York?
What separates New York from other US states when it comes to forming an LLC in New York is that LLCs are not obligated to file an annual report. However, New York does require most LLCs to pay a yearly fee which will depend on the LLC’s gross income in the foregoing tax year.
LLCs with no income, gain, loss, or deduction from New York don’t pay the fee. For those that should pay, the cost can range from $25 to $4,500 and is submitted to the Department of Taxation and Finance (DTF) using Form IT-204-LL.
How Much State Taxes Do LLCs In New York Have To Pay?
If there are employees in your LLC, employer tax is due. If you’re selling goods, you are required to pay sales tax.
How Much Federal Taxes Do LLCs In New York Have To Pay?
The majority of New York LLCs are obligated to report their income to the IRS every year, depending on the structure of the LLC. Form 1065 is used for multi-member LLCs, while Form 1040 is used for LLCs with only one member.
| Range of Tax Rate | |
|---|---|
| Taxes in New York: State sales tax rate– Max local sales tax rate – An average combined state and local sales tax rate – | 4.00 % 4.875 %, 8.52 % |
| The state with the lowest taxes: Alaska | |
| The state with the highest taxes: California | |
| Average taxes paid in the state: a combined state and local sales tax rate – | 8.52 %. |
Is New York A Good Place To Start An LLC?
Besides being able to run a business in the famed Big Apple as an LLC owner, you’ll also enjoy perks like flexibility in management, excellent infrastructure, a diverse and skilled workforce, fewer meetings and reports, and funding programs, along with other business incentives supported by the state.
How Long To Form An LLC In New York?
Creating an LLC in New York takes 3 to 5 business days to file the Articles of Organization by mail, and virtually no time to do it online.
How Much Does It Cost To Run An LLC In New York?
A state filing fee of $200 is required for forming an LLC in New York, plus the additional $20 to reserve the name.
The annual running fee for a NY LCC ranges from $25 to $4,500, depending on the gross income obtained in New York.
What To Do After Formation?
Filing the Articles of Organization for your NY LLC is merely the beginning – there are other aspects to consider after forming an LLC in New York, like:
- Distinguish your business: Design a logo that’ll set you apart from the competition;
- Establish an online presence: Build a website or an eCommerce store;
- Open a business bank account: Keeping your personal fund separate from your business ones is always a good idea;
- Get business insurance: You can never know when you might need one;
- File annual reports: Never forget to file annual reports to attain a good-standing business record in New York.
Resources To Start A Successful LLC In New York
The following links might be of help for starting an LLC in New York:
- https://www.nysenate.gov/legislation/laws/LLC/204
- https://apps.dos.ny.gov/publicInquiry/
- https://dos.ny.gov/application-reservation-name-domestic-and-foreign-limited-liability-companies
- http://www.dos.ny.gov/forms/corporations/1336-f.pdf
- https://appext20.dos.ny.gov/ecorp_public/f?p=2201%3A17
- https://dos.ny.gov/system/files/documents/2021/02/1361-f-a.pdf
- https://www.nysenate.gov/legislation/laws/LLC/206
- https://dos.ny.gov/system/files/documents/2019/01/1708-f.pdf
- https://www.irs.gov/businesses/small-businesses-self-employed/employer-id-numbers
- https://sa.www4.irs.gov/modiein/individual/system-unavailable.jsp
- https://www.irs.gov/pub/irs-pdf/fss4.pdf
- https://dos.ny.gov/system/files/documents/2021/02/1336-f.pdf
- https://www.tax.ny.gov/pdf/current_forms/it/it204ll_fill_in.pdf
- https://www.irs.gov/forms-pubs/about-form-1065-us-return-of-partnership-income
- https://www.irs.gov/forms-pubs/schedule-c-form-1040-profit-or-loss-from-business
- https://dos.nysits.acsitefactory.com/system/files/documents/2019/01/1366-f.pdf
Start Marketing Your LLC In New York
Once your NY LLC is up and running, reaching your targeted audience should be the next step you take. Keeping up with the trends, making your business known, and being present online is key to marketing your LLC the right way.
Adopt some digital marketing strategies like offering deals and promotional content that can help you generate leads that’ll eventually affect wider audiences for your business.
How To Dissolve An LLC In New York?
In case you no longer wish to have your LLC operating in New York, you can go ahead and fill in and file the Articles of Dissolution with the Department of State.
After you have provided all the required information, along with a mandatory fee of $60, you can forward the paperwork to the New York Department of State no later than 90 days from the beginning of the process for the dissolution of your LLC.
Conclusion
Although starting an LLC can pose an issue for many first-time businesses, having all the relevant information on the topic can help keep track of every requirement.
When you choose a name for your LLC, filing the Articles of Organization along with the initial $200 filing fee will establish your LLC in New York. Depending on the structure of your LLC, along with its profits and losses, LLC owners in New York do have to pay taxes.