How to Start an LLC in New York for Free
All LLCs in New York must pay the $200 domestic filing fee. But you can spend less with these cost-saving strategies.
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No, but you can reduce startup and annual costs by doing the following steps:
Starting an LLC in New York without spending might be a stretch, but cutting down costs can be done. Specifically, you could save on New York LLC formation services.
In this article, you'll learn how to bypass certain fees for LLC formation services. If you keep reading, you'll find that this guide is sprinkled with helpful tips on trimming those extra LLC expenses.
Do It Yourself: Form an LLC in New York
If you plan to form an LLC in New York and want to save costs, consider doing everything yourself. This way, you won't have to pay $50 to $399 for an LLC formation service, depending on the additional services included.
You can save on costs when you do everything yourself. That said, here are some of the LLC formation expenses you still need to prepare for:
| New York LLC Fee | Cost |
|---|---|
| Legal and Tax Advice | Up to $1,000+ |
| Name Reservation Fee | $20[1] |
| Fictitious Name Fee | $25[2] |
| Operating Agreement Fee | Up to $1,000+ |
| Registered Agent Services Fee | Up to $399+ |
| New York LLC Formation Fee | $200[1] - $250[3] |
| New York LLC Certificate of Publication Filing Fee | At least $50[4] |
Ready to do it yourself and form your own LLC in New York? Here are all the steps you need to take:
The New York LLC formation fee is $200[1] for domestic and $250[3] for foreign LLCs. You'll also have to pay annual filing fees that typically range from $25 to $4,500.[5] Meanwhile, the Biennial Statement has a fixed $9 fee.[6]
Learn more about the total cost of starting a New York LLC with this in-depth guide.
Set Up Your LLC - $0 + State Fees
- Free business plan included (no credit card required)
- Lifetime compliance alerts
- Comprehensive name check
- Lifetime customer support via email and phone
Seek Business, Legal, and Tax Advice
Professional advice upfront can save you time, money, and headaches in the long run. Yes, it costs money, but it's an investment in the success and longevity of your business.
A legal counsel can help ensure that you're complying with federal, state, and local policies. Meanwhile, hiring an accountant from the get-go can help you minimize your tax burden.
Some attorneys offer online services to help you form your LLC. This could be a cheaper alternative compared to hiring a lawyer from a big firm.
Name Your LLC
There's no cost to naming your New York LLC. It's included when you pay the LLC formation filing fee. And when completing the Articles of Organization, you'll be asked to write the desired name for your LLC.
But before choosing a business name, you must conduct a name search. The Department of State offers a free online database that contains all the business names already being used in New York.
Additionally, you must follow the state's naming requirements to prevent your Articles of Organization from getting rejected. For example, your LLC name must not contain words that falsely imply it's a government agency (like CIA, FBI, and state police).
If you've already got a business name but you're not yet ready to form an LLC, you can reserve your desired name first. Paying the state's $20 name reservation fee will prevent others from using that name for 60 days.[1]
For an additional $25, your New York LLC can do business under a name different from its official registered name.[2] Also called a DBA (Doing Business As), it's ideal if you want to operate under a business name that is more marketable or doesn't have an "LLC" at the end.
However, registering an assumed name doesn't prevent others from using a similar name. You need to file a trademark for that.
Create an Operating Agreement
All LLCs in New York are required to have an Operating Agreement.[7] It's a legal contract that outlines the internal rules and structure of your Limited Liability Company (LLC).
Among other things, an Operating Agreement may state:
- The LLC's management structure (member or manager-managed)
- Each member/manager's initial contribution
- How the profits and losses are distributed
- The responsibilities of each member/manager
- The procedures for when a member/manager leaves or sells shares of the business
Ideally, you must already have a signed Operating Agreement before applying to form an LLC. But if your LLC is already formed, you must make one within 90 days after filing your Articles of Organization.[8]
You can create an Operating Agreement for free by using templates online. You don't have to pay a filing fee since an Operating Agreement is an internal document and is not filed with the state.
The lawyer's fee for drafting an LLC Operating Agreement depends on the complexity of your business.
A business attorney typically charges a flat fee ($500 to $2,000) for a standard Operating Agreement. You might be charged an hourly rate ($150 to $350 per hour) if you need a more complex Operating Agreement.
Choose a Registered Agent
All LLCs in New York are required to have a registered agent. A registered agent is responsible for receiving business and legal documents on behalf of your LLC.
The New York Secretary of State is the registered agent for all New York LLCs by default.[9] However, you can still assign someone else to be the registered agent for your New York LLC.[10]
To save money, you can be the LLC's registered agent as long as you're at least 18 years old and have a physical street address in New York County where your LLC is doing business.
Although you can save money if you become your LLC's registered agent, there can be downsides. Since a registered agent's name and address will be included in the public record, you could be the target of unwanted solicitations, junk mail, or even identity theft attempts.
In New York, registered agent services could cost as low as $35 a year. However, the price gets higher if you want to use additional business services. Some registered agents offer their services for free in the first year.
File Your Articles of Organization
Once you have a business name and registered agent, you can begin completing the LLC's formation documents. Commonly called the Articles of Organization, this document contains important information about your LLC including:[11]
- LLC name (with an "LLC" or "Limited Liability Company" at the end)
- County location
- Registered agent's mailing address
- LLC Organizer's name signature
You must submit the Articles of Organization, along with the $200 domestic LLC formation filing fee, to the Department of State.[1] Double-check all the documents to prevent having to pay the filing fee again.
The New York Department of State does not specifically say how long it takes for LLC formations to get processed. It could take days or weeks depending on the number of applications.
The cost depends on how fast you want your LLC formed:[12]
- $25 = within 24 hours
- $75 = within the same day
- $150 = within 2 hours
Publish Your LLC
Once you receive your LLC's approved Articles of Organization, you must publish a notice to the public in two newspapers for six consecutive weeks.[8]
The newspapers must be designated by the county clerk of the county where your LLC is doing business. Publishing costs vary, but they should all give you a Certificate of Publication after publishing news of your LLC's formation. You must submit this certificate to the Department of State along with a $50 filing fee.[12]
Failure to publish and file the Certificate of Publication with the Department of State within 120 days of your LLC's formation may result in business closure or suspension.[8]
Get an EIN
An Employer Identification Number (EIN) is a unique nine-digit number assigned by the Internal Revenue Service (IRS). This number is used to identify a business entity for tax-related purposes.
You're not required to get an EIN if you're operating a single-member LLC. However, you might still need it down the line if you want to hire employees or open a business bank account.
Some LLC formation services offer to process your EIN for a fee. However, the IRS never charges fees for obtaining an EIN.[13] If you register online, you can get an EIN in a few minutes at no cost.
Select a Free New York LLC Formation Package
Forming a New York LLC yourself can be a valuable learning experience. However, the formation process can be complex, especially for first-time entrepreneurs.
For this reason, consider getting expert advice and support offered by formation services. They can answer questions, clarify doubts, and ensure you're following the correct procedures.
Fortunately, you don't have to pay for all New York LLC formation services. Below are some companies that can process your Articles of Organization for free.
Some LLC formation services may offer to process your Articles of Organization for free. However, you still have to pay for other services like a registered agent service and operating agreement. Often, you'll see the total amount at checkout.
Bizee: Silver Package
Bizee, formerly known as Incfile, offers a Silver Package that comes with a free LLC formation. You just need to pay the state filing fee.
If you form an LLC with Bizee, it will ask for your basic company information. This includes the company name, designator (LLC, L.L.C., etc.), and business purpose. You can use Bizee's website to check if your desired business name is still available.
You won't pay any fees for the registered agent service during your first year with Bizee if you form your New York LLC with them. Bizee's registered agent service includes receiving and scanning important legal documents on your behalf, such as tax notices and service of process.
ZenBusiness: Starter Package
ZenBusiness has a starter package for new entrepreneurs. It includes an LLC formation service and a 100% accuracy guarantee. This means your formation documents will be refiled for free if there is any mistake due to their error.
If you decide to form an LLC with ZenBusiness, it will ask you a few quick questions about you and your business. You also have the option to use their Worry-Free Compliance service, so you never have to worry about missing deadlines for your state-required annual report.
While ZenBusiness offers various business formation packages, its registered agent service comes with an additional annual fee regardless of what package you choose. The current starting price for their registered agent service is $199 per year.[14]
Swyft Filings: Basic Package
Swyft Filings has a basic package that includes free LLC formation services. You just need to pay the $200 state filing fee.
Additionally, Swyft Filing's ComplianceGuard will automatically be added to your total bill. It's a 14-day free trial for a service that helps you stay compliant with annual state requirements. If you don't remove this from your bill before check-out, you'll be charged $149 after 14 days.
However, this processing time excludes government processing times. If you choose the free LLC formation package, the processing time is approximately 2 weeks, plus the time that it takes for the state to process the application after they receive the documents from Swyft Filings.
Inc Authority: Free Package
Inc Authority helps you form an LLC online for free. As with all free LLC formation packages, you still need to pay the $200 New York domestic LLC filing fee.
Inc Authority will prepare your New York formation documents and submit them to the Department of State. Depending on the stage of your LLC formation, whether it's opening in 30 days, 90 days, or more, it will suggest additional services that you might need.
Additionally, if you're interested in a business checking and business credit card, Inc Authority can help set you up with Bank of America.
You won't pay any fees for the registered agent service during your first year with Inc Authority if you form your New York LLC with them. Inc Authority's registered agent service includes receiving important legal documents on your behalf, such as tax notices and service of process.
Other Steps After Forming a New York LLC
Once the New York Department of State approves your Articles of Organization, there are more things to do to get your business up and running while staying compliant with state rules.
Some registered agent services, like Bizee and ZenBusiness, offer additional services to help you maintain an LLC in New York. This will cost more annually, but the idea is to let other people do smaller tasks so you can focus on growing your business.
Alternatively, take note of the additional steps below that you need to do after forming an LLC in New York.
The cheapest way to start an LLC in New York is to do everything on your own. File the Articles of Organization, be the LLC's registered agent, and create the Operating Agreement using a free template online. More cost-saving tips are discussed in detail below.
File a BOI Report
The Beneficial Ownership Information (BOI) report is a new requirement introduced by the Corporate Transparency Act of 2021.[15] You must submit it to the Financial Crimes Enforcement Network (FinCEN) as part of efforts to reduce financial crime in the U.S.
The BOI report includes detailed information about your LLC's beneficial owners, including name, birth date, and address. This information will not be disclosed to the public.[15]
You are considered a beneficial owner if you own 25% or more of the ownership interests in your LLC or if you exercise substantial control over the LLC. The BOI report's due date depends on when your LLC was formed:[15]
- LLCs formed before January 1, 2024: The BOI report is due on January 1, 2025.
- LLCs formed on or after January 1, 2024: The BOI report is due within 90 days after the date your LLC was formed.
- LLCs formed on or after January 1, 2025: The BOI report is due within 30 days of company formation.
There's no filing fee for the BOI report. However, failure to file the BOI report or filing it late can result in significant penalties. This includes paying civil fines of up to $500 per day.[15]
If any of the information reported on your BOI report changes, you have 30 days to report the changes.[16]
Register Business Permits and Licenses
Before officially offering your products and services to the public, you must first get the permits and licenses required for your business.
Each city in New York has different requirements for owning and operating a business. For example, a restaurant license in Buffalo might cost $200.[17] Meanwhile, a food service establishment license in New York City might cost $280.[18]
Additionally, the number of permits and licenses your LLC needs depends on its business purpose. Some businesses may be regulated simultaneously by various governmental offices, racking up total costs of over $1,000.
Check out the New York Business Express for a list of business permits and licenses your LLC needs. You can also contact your county clerk's office to learn about specific county-level requirements.
If your LLC is selling physical, tangible goods within New York that are subject to sales tax, then you need to register for sales tax.[19] You can get one for free by applying through the New York Business Express website.
Open a Business Bank Account
An LLC provides limited liability, meaning personal assets (like your home and car) are protected from business debts and liabilities. However, mixing personal and business finances in one bank account can weaken this shield.
If you can't clearly distinguish between personal and business transactions, a court might hold you personally liable for business debts. A separate business bank account creates a clear separation of personal and business finances.
Opening a bank account for your New York LLC must be done in person by someone with the authority to do so. You can give someone this authority in your Operating Agreement and Initial Resolution.
Once your LLC has a sufficient credit history, you can submit a loan application to the U.S. Small Business Administration. You must submit a business plan and show proof that you understand your LLC's finances.
Create a Business Website
A website and social media presence are dedicated online spaces for your business. They're essential for marketing, customer engagement, and brand visibility in today's digital world.
Hire a professional web developer if you want a highly customized and unique website. Alternatively, do it yourself using a website template through popular content management systems (CMS) like WordPress and Wix. Doing this will cost you around $15 to $20 a month.
Even if you're not planning to build a business website now, it's a good idea to at least buy the domain name. This prevents others from using your LLC's name as a web address.
Domain squatters often monitor newly registered LLC names. They purchase corresponding website domains and then resell them at significantly higher prices.
Get Business Insurance
If your newly-formed New York LLC needs to hire employees, you might need to get workers' compensation insurance.[20]
You can get workers' insurance policies through the following:[20]
- New York State Insurance Fund
- Private Insurance Carrier
- Self-insurance
If you have no plans to hire employees soon, your LLC may still benefit from business insurance that covers expenses from unexpected events and damaged property.
When shopping around for business insurance, consider the specific risks your LLC faces. Prioritize getting the right coverage for your specific needs and get quotes from multiple providers.
Budget for Annual Expenses
All LLCs in New York generally can't avoid three types of annual expenses—the biennial report filing fee, the annual LLC fee, and the annual taxes.
The Biennial Statement, which costs $9 every two years,[6] keeps your LLC's information with the state up to date. It should be filed on your LLC's anniversary month every two years. Meanwhile, the annual fee is based on your LLC's income for the year:[5]
| Annual LLC Fee | Taxable Income Range |
|---|---|
| $25 | $0 - $100,000 |
| $50 | $100,000 - $250,000 |
| $175 | $250,000 - $500,000 |
| $500 | $500,000 - $1,000,000 |
| $1,500 | $1,000,000 - $5,000,000 |
| $3,000 | $5,000,000 - $25,000,000 |
| $4,500 | $25,000,000 and over |
As for other taxes, all LLC members must pay self-employment taxes on their share of the profits. The current combined self-employment tax rate is 15.3%, with 12.4% going to Social Security and 2.9% to Medicare.[21]
You also have to pay the federal income tax, which ranges between 10% to 37% of your taxable income.[22] Depending on the purpose and nature of your business, your LLC might be subject to more tax.
Annual fees in New York typically range from $25 to $4,500.[5] Meanwhile, the Biennial Statement has a fixed $9 fee.[6]
Bottom Line
You can find services, like Bizee and ZenBusiness, that waive their fees for forming an LLC. However, this doesn't mean that you can start an LLC in New York completely free. You still need to pay the filing fees and potentially other expenses.
To reduce startup costs, consider doing everything yourself so you won't have to pay others to process your LLC's paperwork.
Ultimately, while the initial LLC formation service might be free, you must prepare for the financial responsibilities that come with doing business in New York.
References
- ^ New York State Department of State. Forming a Limited Liability Company in New York, Retrieved 02/14/2024
- ^ New York State Department of State. Certificate of Assumed Name for Domestic and Foreign Limited Liability Companies, Retrieved 02/14/2024
- ^ New York State Department of State. Application for Authority - Foreign Limited Liability Companies, Retrieved 02/14/2024
- ^ New York Department of State. Certificate of Publication for Domestic Limited Liability Company, Retrieved 03/18/2024
- ^ New York State Department of Taxation and Finance. Partnership, LLC, and LLP annual filing fee, Retrieved 02/14/2024
- ^ New York State Department of State. Biennial Statements for Business Corporations and Limited Liability Companies, Retrieved 02/14/2024
- ^ The New York State Senate. Section 417, Retrieved 03/04/2024
- ^ New York State Department of State. Forming a Limited Liability Company in New York, Retrieved 02/10/2024
- ^ The New York State Senate. Section 301, Retrieved 03/04/2024
- ^ The New York State Senate. Section 302, Retrieved 03/04/2024
- ^ New York State. Articles of Organization for Domestic Limited Liability Company, Retrieved 03/04/2024
- ^ New York State Department of State. Fee Schedules, Retrieved 02/14/2024
- ^ Internal Revenue Service. How to Apply for an EIN, Retrieved 03/18/2024
- ^ ZenBusiness. Products & Pricing, Retrieved 03/18/2024
- ^ Financial Crimes Enforcement Network. Beneficial Ownership Information Reporting, Retrieved 02/10/2024
- ^ Financial Crimes Enforcement Network. Beneficial Ownership Information Reporting, Retrieved 02/07/2024
- ^ City of Buffalo. License Applications & Code Requirements, Retrieved 02/10/2024
- ^ City of New York. Food Service Establishment Permit, Retrieved 02/10/2024
- ^ New York State Department of Taxation and Finance. Do I Need to Register for Sales Tax?, Retrieved 02/14/2024
- ^ New York State Department of State. Employers Workers' Compensation Insurance, Retrieved 02/10/2024
- ^ Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes), Retrieved 02/10/2024
- ^ Internal Revenue Service. Federal income tax rates and brackets, Retrieved 02/10/2024
Nicole King is a research analyst at CreditDonkey, a business formation services comparison and reviews website. Write to Nicole King at nicole.king@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.
Note: This website is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content. You do not have to use our links, but you help support CreditDonkey if you do.
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