HOW TO START AN LLC IN NEW YORK
You have a business idea. You have a well-defined market. You have just about everything you need to get started with doing business in the state of New York... except the business itself.
Registering an LLC in the state of New York shouldn’t be an intimidating process. In this guide, we’ll go over the specific steps you’ll need to take with the state to properly established and register your Limited Liability Corporation the right way.
Naming the LLC
- First you need to know that the name of your LLC is available. The key here: according to the New York Division of Corporations, State Records, and UCC, your name should be “distinguishable” from the other corporations and business names on file.
- This means you don’t want to start drawing up any signs yet until you’re absolutely sure your LLC will have a unique name. And if you do have signs made up, you’ll want to consider naming the LLC itself something different if you already see it in the database.
How to Tell if Your Name is Taken
- The state of New York offers an online search. There are three options to choose from: “begins with,” “contains,” and “partial.” Don’t proceed with your LLC until you’re absolutely sure that your unique name hasn’t come up under any of these specific search definitions.
- If you have a unique LLC name in mind and can’t find any other instances of it in New York, then you’ll likely be able to proceed to the next step. If you’re still not sure, you have time right now to brainstorm other names to be used with your LLC that don’t sound too similar to preexisting options already established in New York.
Is the Domain Name Available?
- There’s one more search you’ll want to enter before you’re fully confident that you have the name you want: domain name.
- The “domain name” refers to an address such as www.this-is-my-LLC-address.com. Essentially, it’s your web address.
- It can be more difficult finding a unique domain name than it is a unique LLC name. Why? Because at this stage, you’re not only looking at local New York LLC’s—you’re looking at the domain registry of the entire world.
- One key here: when you register your domain, try to find something unique, and don’t include numbers. Your LLC can automatically lose some credibility with its web audience if your site sounds like “MyLLC392.”
Select a Registered/ Statutory Agent
- In its simplest terms, a registered agent is someone who can receive mail on behalf of the LLC, such as tax forms. Of course, the term registered agent goes deeper than that. But at the outset of your LLC’s creation, you’ll need to assign an individual to serve as this registered agent—a third party from the company. Incfile offers FREE Registered Agent service for the first year with every package or as a $0 standalone service.
- A registered agent is a third party with some intense responsibilities, including receiving notices for your business, correspondence from the state’s Secretary of State, and can even receive tax forms and notifications of lawsuits. The seriousness of these responsibilities means you’ll want to include a registered agent you can trust with your business’s most sensitive matters.
Who can be a Registered Agent in New York?
- As you can see at the New York state Articles of Organization form, the state will have you fill out the individual’s address to whom correspondence with the Secretary of State and official mailings will be sent.
- If you do want a registered agent, you have to rely upon someone very trustworthy, as these individuals are allowed to receive mail on behalf of your LLC. Some services even offer registered agent services–in these cases, look for reputable services that have experience in dealing with companies and LLCs like yours.
Filing Articles of Organization
- In order to create your LLC in New York, you’ll be expected to file the Articles of Organization—a sort of constitution for your private company. Here, once again, is the link to the New York state Articles of Organization form.
- This form is short—only two pages—and will require basic information like the name of your LLC and the address where correspondence will need to be sent.
- As you can see on that form, you’ll be expected to submit a $200 filing fee made payable to the New York Department of State with the Articles of Organization—so only mail it in once you’re prepared to meet that fee.
- You can also file for your LLC in New York online.
Create Operating Agreement
- The Operating Agreement is essentially the blueprint for how your LLC will run—the organizational structure, management & voting, etc. Think of it as a document that outlines how the LLC will function. If you have several partners in an LLC, it becomes even more important, because it serves as the written foundation upon which these relationships will be built.
- In New York, according to the New York Department of State, “The members of an LLC are required to adopt a written Operating Agreement.” This can be entered into within 90 days of the filing of the Articles of Organization—before or after that filing. While “the law is silent on the consequences of not adopting an Operating Agreement,” it’s always better not to break the law. The Operating Agreement will be a good idea for all members involved in either case.
- Another requirement of applying for a New York LLC: advertising in local papers. This might seem like a trivial cost at first, but depending on your county, those costs can add up. LLCs will be expected to publish within 120 days of formation a notice in two newspapers (daily and weekly) in the county where the LLC was formed. Make sure to budget for these advertising costs in your LLC application process.
RUNNING YOUR BUSINESS
Getting Your EIN
- An EIN is an employee identification number, issued by the Internal Revenue service. Sometimes it is also called a Federal Tax Identification Number. It’s a unique number issued to each business. You’ll need an EIN to open a business bank account; file Federal and State Taxes; and hire employees.
- Before you get your EIN make sure your new business has been properly formed before applying and be wary of paid sites. EINs are free direct from the IRS.
- The easiest way is to apply online for an EIN. Note, the IRS website has office hours, and is only available Monday through Friday, 7am to 10pm. Yes, we also agree this is one of the most ridiculous things we’ve ever seen. You can call 1-800-829-4933, between 7am to 7pm of your time zone, Monday to Friday. Snail mail: You can download the form and mail it in.
Keeping Business and Personal Accounts Separate
- Get a business bank account for your business. This will help you protect your personal assets from potential creditors and lawsuits, and will also make life a lot easier come tax time.
- Get a business credit or debit card. This will help you keep your expenses separate and easier to track.
- No matter what business you run, accounting software and processes is a must for any small business. If you have an accountant, ask them which software they work with and recommend. A good accounting system is necessary to track income and expenses, so you can easily see if you’re making money and make filing income taxes so much easier.
- Always try and find something that will: sync with all of your bank and credit card accounts automatically – not just downloads, but auto sync; auto-match vendors, customers and other accounts; and let you accept credit cards and ACH drafts with ease. This can be applied for online, as can unemployment.
Setting Up for Taxes in New York
- The most important thing your business can do is pay its taxes the right way. For most LLC’s, that means focusing on two very important issues: employment issues and sales taxes.
- First, you need to know about tax withholding in New York. You must also report new hires to the state.
- There is a lot to know, so it’s best to keep to the official information when handling state taxes as an LLC. You can see more about your tax responsibilities to New York here.
How to Register for Sales Taxes in New York
- You’ll have to Register as a Sales Tax Vendor with the state. This will require a NY.gov ID, a specific form, an application checklist, and instructions for the application—all of which can be found at that link. If it sounds like a lot of information to handle at once, try breaking it down step by step—if you haven’t formed your LLC yet, you don’t have to handle all of this at once.
Having the Right Licenses and Permits
- Every business is different, so we can’t tell you specifically which licenses and permits you’ll need to carry on business in New York. But keep the following in mind:
- Federal issues: Make sure that your company’s dealings are legal according to Federal law and that any Federal permits or paperwork you need is squared away before you start conducting business.
- New York: Browse through the New York state LLC guide and make sure that you have everything you need. You may even want to consider calling the state and describing to them what kind of business you’ll be conducting.
- Local: This is especially relevant if you conduct public business, such as having a food truck on public land. Always be sure to have the proper licensing ready and in place before you start.
- Every business needs to be protected in more ways than one—having the right insurance in place is vital to ensuring your long-term survival.
- Worker’s Compensation in New York is vital if you have employees. Read more at the Workers’ Compensation Board in New York.
- General Liability Insurance is vital for every business to have, as you can never foresee which issues might spring up and plague your business along the way.
- If your LLC is going to keep up with all regulations, then employee compliance is vital. Some businesses even hire employee compliance officers to ensure this compliance.
- In New York, employees will be expected to comply with all Federal and state laws. You can offer employee compliance training, hire an employee compliance officer, and detail the specifics of your compliance standards in a written employee code as well as supervising employee behavior.
KEEPING YOUR LLC COMPLIANT
Filing Your Annual Report
- To stay fully compliant as an LLC, be sure to keep New York resources bookmarked. Every time there’s an action that requires specific filings, you want to remember the proper process and paperwork.
- There’s also the issue of the annual report. Currently, New York does not require annual reports, but it does require biennial reports, or a report every two years. Additionally, there will be some annual fees that you need to pay attention to in order to remain in good standing with the state.
- If you notice that you were required to file something with the state for your LLC but didn’t, you may have to do a late filing. Pay attention to all of the partnership and LLC/LLP tax forms at the New York state Department of Tax and Finance, especially estimated taxes (filed quarterly).
- See more about late filings and late payments in New York here.
FILING A FOREIGN LLC IN NEW YORK
- Filing a foreign LLC in New York can introduce a whole host of other forms and requirements. Fortunately, New York state makes the following list of forms available online, including fee schedules, applications for authority, and certificates for changes within your LLC as you conduct business
ABOUT HOW TO START AN LLC
I'm an entrepreneur myself. When talking to others who want to start their own business, they often get wrapped up in the nitty gritty of paperwork and forming the company. They forget that what really matters is customers, sales, and profit. That's why I created How to Start an LLC.org: a simple resource and guide so you can spend less time on forming your company, and more time on building it.
My lawyers want me to remind you that I'm not a lawyer and that I'm completely unqualified to offer legal advice. This site is meant to serve as a reference for you on your journey. If you have questions or concerns, please contact a qualified lawyer (or accountant) to help you. Also, as a general rule, never take random legal advice on the internet.