Entrepreneurs

How to Start an LLC in New York in 2022

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Establishing your LLC in New York can be a confusing process, especially considering the many rules and requirements it takes to get your business set up. Fortunately, we’re here to help you out and have created a full guide detailing every step you will need to know in order to get your business up and running.

In this article, we will be discussing important first steps in setting up your LLC, such as naming the business and deciding on taxation structures. We’ll also be giving you an idea of what it takes to keep your LLC running, in addition to detailing any fees associated with your LLC’s setup, so you can understand the exact costs of getting your New York LLC up and running.

That said, starting an LLC on your own is challenging and many things can go wrong. The good news is that you can work with third-party LLC services that make it easy to get started.

Our Top Pick: ZenBusiness

Rating: 5/5  

ZenBusiness is a well-rounded company that provides companies with several LLC services. This company makes it easy to create an LLC in New York and charges below-average prices. The cost for state LLC fees is $205 and the cost for State Corp Fees is $125. ZenBusiness also offers registered agent services, templates for operating agreements, and boasts impressive customer support.

Runner Up: BetterLegal

Rating: 4/5

BetterLegal is almost as great as ZenBusiness but with some key differences. BetterLegal has several packages that you can use for your LLC but to get started it costs $299 plus an additional $200 because of New York’s filing fees. BetterLegal also has services that go beyond LLC services, which is helpful for people who need more legal/filing assistance.

Setting Up Your LLC in New York

There are many preliminary steps associated with starting up your LLC in New York. In order to get your business legally established, you will have to proceed through these steps and make sure everything is in order before filing.

Naming Your New York LLC

One of the most important steps in starting your LLC is finding a perfect name for it. The name you choose needs to be unique from other businesses in the state and follow some important naming rules.

Legally Required Designation

In accordance with New York LLC law, the name of your LLC must have one of the following phrases or abbreviations in its name; no other phrases or abbreviations are permitted for use in your LLC’s name.

  •   Limited Liability Company
  •   LLC
  •     L.L.C.

Unique Name

As you start to look for an LLC name, it can be helpful to use the business entity search tool located on the New York Department of State’s website. That said, tools like that are often clunky and take a lot of time to get results. Instead, we recommend using a company like ZenBusiness’ search tool instead. Running a search with this will tell you whether or not your desired name is available. You should keep in mind that your LLC’s name needs to be completely unique and distinct from all others in the state.

This being said, the business entity search only provides the names of established entities and not those that are in the process of being established; the Department of State recommends filing a written request for a name availability search as this will be more in-depth. To do this, you will need to mail in a written request along with a list of names to be searched to the address below. There is a $5 fee for this service.

The New York Department of State also recommends performing a search on the U.S. Patent and Trademark website to avoid infringement on any type of trademark or service mark that a business in the state may possess.

If you have found an LLC name that you want to use, you can reserve it ahead of establishing your business by submitting an Application for Reservation of Name. This application will hold your chosen name for up to 60 days before filing your Articles of Organization. There is a $20 filing fee, and the document must be mailed to the address listed below. You can choose to pay an extra $25 for expedited filing.

New York Department of State, Division of Corporations

One Commerce Plaza

99 Washington Avenue

Albany, NY 12231

Once you file the Application for Reservation of Name, you will receive a receipt entitled “Certificate of Reservation.” This receipt must be filed along with your Articles of Organization in order to officially establish your business.

Additionally, when looking for an LLC name, you may also want to perform an available domain name search. Finding a matching domain name and purchasing it ahead of time can save you future stress when it comes to setting up a business website.

Restricted Words

As you decide on an LLC name, you should be careful not to include any words that may risk confusing your business with a state or federal government entity. This can include, but is not limited to, words like “FBI,” “Treasury,” “IRS,” or “State Department.”

You also need to keep in mind that using words such as “bank,” “chiropractor,” “attorney,” or other professional indicators may require the presence of a properly licensed individual in your LLC. In New York, it is permitted to set up a Professional LLC, but you may need to file separate paperwork and follow specific professional licensing laws in the state. You can read more about this process here.

Using a Trade Name

New York LLC law does allow you to use a trade, or DBA (doing business as), name for your LLC in the state. This means that while you can continue using your legally registered LLC name on all official state and federal documents, you can use your DBA name when interacting directly with the public.

To register your DBA name in New York, you will need to file a Certificate of Assumed Name with the New York Department of State. The filing fee for this is $25, except in the counties of New York, Kings, Queens, Bronx, and Richmond; if your LLC is located in these areas, you will need to pay a $100 filing fee.

You will need to mail your completed registration form and a check for the applicable filing fee to the address below. You can also choose to pay an additional $25 expedited filing fee for 24-hour processing.

New York Department of State, Division of Corporations
One Commerce Plaza
99 Washington Avenue
Albany, NY 12231

Provide a Forwarding Address

In New York, the Department of State automatically acts for every LLC’s agent for service of process (this is also sometimes called a registered agent). The Department of State will receive all official documents addressed to your business, such as government communications, tax documents, and legal filings, and will forward them to the LLC office address that you provide. They will also be the party contacted in the event of a lawsuit and will then forward those documents to your LLC.

In most cases, you will use your LLC’s principal office address as the forwarding address. However, you can choose to appoint a registered agent service instead and use the business’s address as your forwarding address; the registered agent service will then send the documents received from the Department of State to your business.

It is also important to note that using a registered agent service that is located in a different county from your business may come in handy regarding New York’s publication requirements for newly formed LLCs. We will talk more about this later.

File Your Articles of Organization

To officially establish your LLC in the state of New York, you will need to file your Articles of Organization with the Department of State, Corporations Division. This document will contain essential information about your LLC, some of which you can preview below.

  •   Your LLC’s name
  •   The New York county your LLC will be located in
  •   The address the Department of State should forward notices to
  •   Your LLC’s organizer’s signature
  •       The name of the filer for the Articles of Organization

You can file your Articles of Organization either online or through the mail. There is a $200 filing fee associated with this form, and you can choose to pay the extra $25 expedited filing fee for 24-hour processing. You can also opt to pay an additional $75 for same-day processing or $150 for 2-hour processing.

Online

To file your Articles of Organization online, you should visit the online filing portal provided by the Department of State. From there, you can create an account in the system and follow the instructions to file your document. Once you have submitted the form, you will receive an emailed PDF receipt as an acknowledgment of your filing.

By Mail

If you wish to file your Articles of Organization through the mail, you will need to print off the form found here and then fill it in with dark ink. Then, you should place the completed form into a secure envelope along with a check for the $200 filing fee and mail it to the address below.

Department of State, Division of Corporations
State Records and Uniform Commercial Code
One Commerce Plaza
99 Washington Avenue
Albany, NY 12231

Create an Operating Agreement

Unlike many other states, New York does require LLCs to create an operating agreement. This document should detail clear guidelines for exactly how your LLC’s business is managed and define the rights of managers and members. It may also include some of the information below.

  •   Member limitations
  •   Member rights and responsibilities
  •   Details each member’s initial investment
  •   Distribution of the LLC’s profits and losses
  •   Voting rules for members and managers
  •   Succession plans for members and managers
  •   Reasons for an LLC dissolution
  •   Guidelines for an LLC dissolution
  •     Guidelines on amending the operating agreement

You can find a template for creating an operating agreement here, but be sure that you review it carefully and change and add items that are applicable to your LLC’s situation. If you are confused about how to craft your operating agreement, you should meet with a professional business advisor or an attorney to work out the details of your document.

Additionally, if you are applying for LLC financing, you may be expected to send a copy of your operating agreement along with your application in order to open business accounts, loan applications, and secure other business services. This is often done to prove your LLC is a separately operating business.

Get an EIN/Tax ID Number

Once your Articles of Organization have been filed, you will need to obtain a Tax ID number, also known as an Employer Identification Number (EIN), through the IRS. Any LLC that has more than one member or any single-member LLC that wants to either hire employees or be taxed as a corporation is required to receive an EIN; the application is completely free of charge.

You will need to use your EIN to identify your business to the IRS on all tax documents and necessary government filings – the number acts much like a social security number for your LLC. If you want to hire employees, file federal taxes, open business bank or credit accounts or apply for business funding, you will need an EIN.

You can file the EIN application either online or by mailing it in. Keep in mind that if you are a foreign filer or do not have a social security number, you will need to file for your EIN through the mail.

Online

The quickest and easiest way to apply for your EIN is online; you will receive your number once your application is completed. Visit the IRS website to apply for your EIN for free.

By Mail

You will need to fill out this form when applying for your LLC by mail. If you are a foreign filer or do not have a social security number, leave section 7b blank. Mail the completed form to the address below. You can follow up on any questions with the IRS at (267) 941-1099.

Internal Revenue Service
Attn: EIN Operation
Cincinnati, OH 45999

Keeping Your LLC Running

Once your LLC has been established in New York, there are several more steps you will need to take to ensure that your business meets ongoing requirements and stays running smoothly.

Complete New York’s Publication Requirements

Within 120 days of your Articles of Organization becoming effective, you will need to meet the state’s publication requirements for new businesses. To do this, you will need to call or visit the County Clerk’s office in the county that your LLC is operating and ask them for the contact information of the approved newspapers. You will receive the contacts for both a daily newspaper and a weekly one.

From there, you will contact the newspaper directly and follow their instructions to get your notice placed in the paper. Your notice of publication will need to include at least the information below; check with your county for specific publication requirements.

  • Your LLC’s name
  • Your LLC’s establishment date
  • The street address and county of your LLC
  • Whether you agree with the New York Department of State acting as your registered agent and the address that notices need to be forwarded to
  • Your LLCs dissolution date (if applicable)
  • The LLC’s registered agent (if applicable)
  • Your LLC’s purpose

You will need to run your notices of publication in each newspaper for six consecutive weeks. Fees vary depending on the county that you are in and how long your ad is (most newspapers charge by word count) but can range from anywhere between $100 and $2000 (higher numbers are found in places like Manhattan).

That being said, if you have a registered agent that is located outside of the more expensive county that your LLC’s office is in, you can potentially pay fewer fees by publishing your notice in that county. Check with any registered agent service that you have for more information on this process.

Once your notices of publication have completed their six-week run, the newspapers will send you an Affidavit of Publication. You will need to keep the affidavit and file it along with your Certificate of Publication in order to complete the publication requirement.

File Your Certificate of Publication

After you have received your Affidavit of Publication from your selected newspapers, you will need to file a Certificate of Publication with the New York Department of State’s office. This is what will mark your publication requirement as complete.

To file this form, you will need to mail the completed document along with your affidavit to the address below. Be sure to include a check for the $50 filing fee in the envelope when mailing this form.

Department of State, Division of Corporations
State Records and Uniform Commercial Coda
One Commerce Plaza
99 Washington Avenue
Albany, NY 12231

If you do not complete these requirements, your LLC will not be eligible to sue in any New York State Court, and your business will not be in good standing with the state. This means that you may lose your legal protections as an LLC in the case of a lawsuit.

File Biennial Statements

Every LLC that is operating in New York is required to file a biennial statement. This report is due every two years during the calendar month in which the LLC was initially established. The Biennial statement must be filed online with the Department of State, and there is a $9 filing fee associated with it. To make sure you never miss this deadline we always recommend working with a registered agent from an established company like ZenBusiness.

Separate Your Business Finances

New York does not require that your LLC establishes a separate bank account, but you may want to consider starting one anyway. A business credit or debit account can help keep your LLC’s finances separate from any personal ones, fully establishing your LLC as an independently operating business. This is especially helpful in the case of lawsuits or other legal issues surrounding your LLC.

When opening a debit or credit account for your LLC, you will most likely need to show your Articles of Organization, Operating Agreement, EIN, or other LLC documents. You should also make an effort to compare all of your banking options before making a choice on where to open an account; different banks will have varying minimum required balances or credit spending limits, and you want to be sure that you select something that is the best for your LLC’s needs.

Keep Up With Federal and State Taxes

It is important to keep up with both federal and state taxation requirements for your LLC in order to avoid any major tax penalties that can set your business operations back.

Federal Tax Requirements

There are several different tax structures you can choose from for your LLC that can meet different company needs, as each tax structure comes with its own unique type of federal taxation requirements. This article can help you gain an in-depth understanding of the differences between each type of tax structure and help you decide which is best for you.

In general, most LLCs are taxed as sole proprietorships or partnerships. This means that you will be expected to file Schedule C along with your individual income tax return to declare any income that you receive through your LLC (your LLC is acting as a pass-through entity in this situation). When using this tax structure, you should keep in mind that you will most likely need to pay self-employment tax (which has a rate of 15.3%), in addition to any income tax. You may also need to make quarterly estimated tax payments to avoid any IRS fines; the IRS website gives more details on this.

If you want, you can choose to have your LLC taxed as a corporation, like an S Corporation or a C Corporation. You will need to fill out IRS Form 8832 and IRS Form 2553 to declare this. After these forms have been processed, your LLC will be treated as a corporation and expected to file a separate corporate tax return with the IRS.

New York Business Taxes

In New York, there are several different types of state taxes that you may need to pay based on how your LLC is taxed. For LLCs that are taxed as pass-through entities, such as sole proprietorships and partnerships, you will need to pay a tax referred to as the filing fee. This tax is paid annually, and the amount of the fee is based on gross income for the tax year immediately preceding the current tax year. If your LLC did not have any income for the preceding tax year, the filing fee is $25.

More instructions on this tax and paying it can be found on New York’s Department of Taxation and Finance website.

For LLCs that are taxed as an S or C corporation, you may be liable to pay corporation taxes. You can find more information about registering for these taxes and what you might need to pay on the Department of Taxation and Finance’s website here.

Sales and Use Taxes

If your LLC will be selling goods and services in the state, you will likely need to register for sales and use taxes. These taxes are paid to the Department of Taxation and Finance. More information can be found here.

State Employer Taxes

If your LLC will have employees, you will need to register for both withholding taxes and unemployment insurance taxes. Keep in mind that you may also need to register for and pay these same taxes on a federal level.

More information on withholding taxes can be found from the Department of Taxation and Finance here, and more information on unemployment insurance taxes can be found through the New York Department of Labor here.

Acquire Necessary Permits and Licenses

While there is no general business license requirement in New York, your LLC may need to obtain certain permits and licenses depending on the county or city it is located in. You can check with your County Clerk’s Office for more information on this.

You may also need to obtain licenses on a professional level or meet state professional licensing requirements before operating your business. The New York Business Express website can give you more information about licensing. You will also be able to get any questions about starting your LLC answered through the contact form on the website.

Additionally, your LLC may need to obtain permits or licenses on a federal level, though whether this is needed or not depends on the type of business you are running. For help determining if you need to meet additional federal requirements, you can use the licensing directory on the U.S. Small Business Administration’s website.

FAQs

The answers to these frequently asked questions can help clarify any worries you may have about establishing your LLC in New York.

How Much Does It Cost to Set Up an LLC in New York?

In New York, it costs $200 to file your Articles of Organization with the Department of State and $20 to reserve an LLC name ahead of time. You will also need to pay applicable fees for your newspaper notice of publication and for filing the Certificate of Publication, which carries a $50 filing fee.

What’s the Cheapest Way to Start an LLC in New York?

The cheapest way to start an LLC in New York is to file your Articles of Organization without paying to reserve an LLC name ahead of time or registering a DBA name. Doing it this way will only cost you $200, plus publication fees and your $50 Certificate of Publication filing fee.

How Much Do New York LLCs Pay in Taxes?

How much your New York LLC pays in taxes depends on the individual tax structure that you have set up for your business. You may also need to pay applicable state taxes, including LLC annual filing fees, corporation taxes, state employer taxes, or sales and use taxes.

How Often Do I Have to File State Reports?

In New York, your LLC will need to file reports biennially. The report will be due every two years during the anniversary month of your LLC’s establishment, must be filed online, and carries a $9 filing fee.

How Do You Dissolve a New York LLC?

If you are finished conducting business under your LLC, you will need to file Articles of Dissolution with the New York Department of State, in addition to notifying the Department of Taxation and Finance. There is a $60 fee for filing the Articles of Dissolution.

You will also need to consult your operating agreement and follow the terms that your LLC previously developed for closing down operations and tying off any loose ends related to your LLC’s business.

New York LLC Resources

The below list of resources can help guide you through each step of the LLC establishment process in New York.

Start an LLC in New York Quickly With a Professional Service

Going through the process of starting and managing an LLC is challenging, especially if you go at it alone. The good news is that you can have someone behind you to provide you with support, assistance, and even peace of mind. These are benefits you’ll achieve when working with a third-party LLC services company. Companies can handle the paperwork for you, provide you with a registered agent, file reports, and even store data for you with cloud-based solutions. 

At the end of the day we always recommend that people work with a professional LLC service. While it might cost more in the short-term, it can provide you with the longevity and stability you need in the long term.

Our Top Pick: ZenBusiness – 5/5 Rating

ZenBusiness is the top choice because of the company’s commitment to the success of its clients. The company provides you with 24/7 support and is attentive to questions or problems you might encounter. 

Moreover, the company can help you start an LLC in New York for a good price and provide you with support after starting the company. For example, ZenBusiness has one of the best registered agent services around and can handle filing biennial reports, offer cloud-based data storage, and keep your company in good standing with the state.

Runner Up: BetterLegal – 4/5 Rating

Next we have BetterLegal, which is another solid option for LLC services in New York. The services it provides include helping companies get started, offering registered agent services, and more. BetterLegal also has great customer support and has several years of experience backing up its reputation. You can’t go wrong with BetterLegal in New York.

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