How to Start an LLC in New York 2023

Every state has different rules when it comes to starting an LLC. Find out how it works in New York and what you need to do to start one. Read on.

New York enforces strict regulations on businesses in the area. They often charge expensive penalties for violations.

That's why you need to familiarize yourself with the process if you want to start an LLC. Especially since the requirements may differ in other states.

So, how does starting an LLC in New York work? What do you need to create one?

We've got your back in this article.

How to Start an LLC in New York?

We've nailed down the details of New York's requirements. You can start your LLC in 8 straightforward steps.

Here's what to do first:

1. Name your LLC

Before you can file your formation documents, you need to choose a business name. Just make sure that whatever name you choose follows the state's guidelines.

New York restricts certain words and phrases. And in some cases, you might need the approval of other state agencies for specific business names.

But generally, here are New York's LLC name requirements:

• It should include words that indicate it's an LLC (like LLC, Limited Liability Company, or L.L.C.)
  
• It should be unique and can't be confused with other registered companies in the state
  
• It shouldn't imply an association with any government agency or department
  
• It cannot be confused with any government agency or department

You can secure your preferred LLC name by filing an Application of Reservation of Name with the state. Name reservations cost $20 per filing and only last for 60 days.

But if you need an extension, you can file a Request for Extension of Reservation of Name to extend it for another 60 days. Of course, this costs another $20.

Using a DBA for a New York LLC
If you want to use another name to conduct business, you'll need to get a DBA (or "assumed name" in New York). This can give your business additional flexibility, especially for marketing campaigns.

The state requires all companies, including LLCs, to register their assumed names before they can use them in their business activities. You'll have to file a Certificate of Assumed Name with the Secretary of State and pay the $25 filing fee.

Just note that your DBA/assumed name, like an LLC name, must be available before registering. You can use the same database to check if it's already taken by another business.

2. Appoint a registered agent

In New York, the Secretary of State serves as the default agent for service of process (aka registered agent) for all LLCs in the area. But you can still assign your own if you want.

You just need to file a Certificate of Change with the state department and pay the $30 filing fee to appoint your own agent.

You can assign either an individual or a business to the role. Just make sure that whoever you choose meets the following criteria:

• At least 18 years old at the time of assignment
  
• Must be a resident of New York
  
• Has a physical street address in the state (no PO boxes or virtual addresses)
  
• Is authorized to conduct business in New York (for third-party companies)
  
• Is always available to receive documents in person during regular business hours

You can also be your own registered agent as long as you meet the requirements mentioned. But it's still generally better to assign the role to someone else.

3. File your Articles of Organization

You'll need to file your Articles of Organization with the New York State Department and pay the state filing fee. If you're a foreign LLC (NY isn't your home state), you need to file an Application for Authority with the filing fee instead.

Your Articles of Organization serve as your LLC's application and official documents after approval. It contains all the relevant information about your New York LLC, such as:

• Entity name
  
• Official county (where your LLC will be)
  
• Registered agent details (if appointing your own)
  
• Mailing and email address
  
• Management structure
  
• Effective date (if applicable)
  
• Dissolution date (if applicable)
  
• Applicant's name and address

You can file them online using the state's official platform. Or just mail it to the state department's Division of Corporations. You can drop them off in person or send them via fax.

The state will issue an official filing receipt after you submit the documents. Remember to keep this since the state doesn't replace or issue duplicates for lost/damaged receipts.

Also, be sure to double-check the information since this will be the official proof of your LLC application. If there are mistakes in your documents, you'll need to file a Certificate of Correction with the state department and pay the $60 filing fee to correct them.

4. Publish your LLC in newspapers

New York is 1 of the 3 states with a publication requirement for newly formed LLCs. You need to publish a notice of your LLC's creation in local newspapers within 120 days of its approval.

It should run once a week for 6 consecutive weeks in 2 different newspapers (daily and weekly). The newspapers must be in your LLC's county and approved by the county's clerk.

Aside from this, you need to file a Certificate of Publication with the state department and pay the $50 filing fee. (Foreign LLCs need to use this form instead.)

5. Create an operating agreement

An operating agreement is a document that outlines everything about your company's operations. This can range from daily operations to protocols to resolve possible member conflicts.

New York is one of the few states that require LLCs to have a written operating agreement.^[2] In most states, having one is optional but highly recommended.

New York also doesn't impose strict rules on your operating agreement's contents. But generally, it would be a good idea to include the following information:

• Ownership interests
  
• Initial contributions
  
• Members' roles, duties, and responsibilities
  
• Management structure
  
• Voting and member admissions/departure protocols
  
• Terms for division and distribution of company profits and losses
  
• Dissolution

An operating agreement can keep your company running smoothly and efficiently. It can also give you more control over what happens to your business. Having one can even reinforce your LLC's liability protection.

The law states that you need to create one before, during, or within 90 days of filing your Articles of Organization. That said, even though it's a requirement, you don't need to file your operating agreement with the state.

You can just keep it with your company's other documents.

6. Get an EIN

An Employer Identification Number (EIN) is a 9-digit number the IRS assigns to businesses, mainly for tax purposes. You need to get one for your LLC, even if you don't have or don't plan on hiring employees.

That's because LLCs are separate entities from their owners. And an EIN will be the unique ID number that government agencies use to distinguish your business from other businesses. Only single-member LLCs can opt not to get one because they can still use the owner's SSN.

To get an EIN, you can apply directly with the IRS or hire someone else to handle it. Applying directly is free but formation companies may charge you for this service.

7. Submit your Biennial Statement

Biennial Statements (called "annual reports" in other areas) ensure that the state's records of your LLC are still accurate and up to date.

They're a requirement for all New York LLCs (domestic and foreign). You have to file them to the state department even if there are no changes to your information.

It's due every 2 years on your LLC's anniversary month. So if you formed your LLC in June 2022, you need to submit it in June 2024. After that, the next due date would be June 2026.

How to file your Biennial Statement:
All statements should be filed via the state's e-Statement Filing Service. You need to contact the state department's Division of Corporations if you can't do it online. They'll give you a paper form to fill out and submit instead.

It costs $9 per filing, which you can pay only using debit or credit cards. They accept Visa, Mastercard, and American Express cards.^[3]

8. Pay business taxes, if applicable

Like most states, New York LLCs are taxed as either sole proprietors (single-member) or partnerships (multi-member) by default. The only difference is how they report their federal income taxes.

LLCs taxed as sole proprietors must report income taxes as part of the owner's personal tax returns. Meanwhile, LLCs taxed as partnerships have to use Form IT-204 to report theirs.

New York also requires LLCs to pay state income taxes or "annual filing fee." This ranges from $25 to $4,500, depending on your company's income range. You can check the state's full table to learn more.

For LLCs with C-Corporation tax status:
If you choose a C-Corporation tax classification, you must also pay a Corporate Franchise Tax (or simply "corporate tax") in New York. The exact rate varies per business.

Most general business corporations use the following bases to compute their rates:

• Business income (usual rates range from 6.50% to 7.25%)
  
• Fixed-dollar minimum tax
  
• Business capital

Be sure to review New York's corporate taxes for more info.

Other taxes:
Aside from these, your LLC might also need to pay other taxes, depending on your business activities and industry. Some examples you need to consider are:

• Sales and use tax
  
• Self-employment tax
  
• Employer tax
  
• Local taxes (city or county)
  
• Industry-specific taxes

Make sure you research the specific taxes your LLC needs to pay to remain compliant. Otherwise, your company may lose its good standing with the government and incur penalty fees.

Bottom Line

New York tends to be stricter with their regulations compared to other states. And the requirements for LLC formation are somewhat different too.

That's why it's important to familiarize yourself with how it works in the Empire State. That way, you're sure to comply with the different requirements.

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