A New York limited liability company (LLC) is a business entity that offers strong liability protection, a flexible management structure, and certain tax advantages in the United States of America.
If you want to start a small- to medium-sized business or startup, the quickest and simplest way to do so is to create a New York limited liability company (LLC). An LLC offers some of the same protections and benefits larger corporations enjoy, while also requiring adherence to simpler rules and laws.
Advantages of Starting a New York LLC:
- It limits your personal liability from your business liability and debts
- Easy management, regulation, and administration
- Exemption from the New York Corporate Income Tax
- Simple tax filing and possible advantages for tax treatment
- Low filing fee.
How to Form an LLC in New York
Choose a Unique Business Name
You’ll require a distinctive and original name for your New York LLC that’s not being used by any other business in the state. Once you’ve chosen a name, make sure it’s vacant in the state. You can perform this by conducting a search on the NYS Department of State website.
Provide an Official Address for Your LLC
Every LLC in New York must have a specified street address. This could be your company’s office building or your personal residence in New York. You may also be able to use a virtual mailbox for your business address if you run a home-based business and don’t want your home address publicized as part of your business’s public record.
Assign a York Registered Agent
An individual who accepts official correspondence and is responsible for filing reports with the New York Secretary of State is known as a Registered Agent. If you have an LLC, New York requires you to have a Registered Agent. You’ll appoint your Registered Agent when you file the Articles of Organization to create your business.
You can fill this position yourself, appoint another manager in your business or use a Registered Agent service. If your New York Registered Agent is a person, they must have a physical street address in New York and must be present during business hours to receive essential documents on behalf of your company.
File Your Articles of association
Once you’ve compiled all the information for your LLC, you’ll have to file your New York LLC Articles of association with the NYS Division of Corporations. This document officially creates your LLC.
Here’s what is included:
- Your business name and address
- Information about your Registered Agent
- The county where your business is located
- Name and address of the company.
Your Articles of association can be mailed or filed online via NYS Business Express. Note that the state charges a $200 filing fee for NYS LLC formation.
You are only required to file your Articles of association with New York once, but you’ll need to file a biennial report. You may likewise need to pay the New York Corporate Tax if applicable to your business.
Requirements to Form a New York State LLC
Section 206 of the New York State Limited Liability Company Law requires that within 120 days after the effectiveness of the initial articles of organization, a limited liability company (LLC) must publish in two newspapers a duplicate of the articles of organization or a notice associated with the formation of the LLC. The newspapers must be assigned by the county clerk of the county in which the office of the LLC is located, as stated in the articles of organization. After publication, the publisher of each newspaper will give you an affidavit of publication. A Certificate of Publication, with the affidavits of publication of the newspapers attached, must be submitted to the New York Department of State, Division of Corporations.
Get an EIN
An Employer Identification Number (EIN) is used by the IRS to recognize your business on tax filings. You can apply for an EIN instantly from the IRS for free. Applying online is the quickest way to obtain an EIN, but you’ll need to use the paper form if you don’t have a social security number.
Create an Operating Agreement
An operating agreement is an agreement between you and the members of your LLC that solidifies the rules and structure of your business. It determines how voting works, how membership interest is substituted, how profits and losses are distributed, and how the operating agreement itself may be modified. It’s your LLC’s basis for resolving internal disputes.
Section 417 of the New York Limited Liability Company Law imposes that LLC members must adopt a written Operating Agreement. It doesn’t need to be filed with the NYS Division of Corporations, however, it should be kept on hand to meet the legal requirement and to insure your business from any future alterations and events.
Open a Bank Account
An LLC has limited liability because it’s a distinct legal entity, distinguished from its members. Fusing personal and business finances deteriorates the separation between your LLC and yourself and put your LLC’s limited liability in danger. So in order to avoid this, Your LLC needs a bank account.
Fund the LLC
Next, every member should make an initial contribution to pay for their membership interest. Members can make contributions in the form of property or services. Keep in mind that contributing property or services to an LLC can trigger tax events.
File State Reports & Taxes
Every other year, New York LLCs must file the Biennial Statement with the New York Department of State. The goal of this form is to keep the state up-to-date on who operates your LLC and how to reach your business. New York LLCs also need to pay a yearly filing fee.
New York also offers incentive programs specifically designed for small businesses, making them ideal for LLCs.
Starting a New York business of any kind in any industry isn’t easy, but with fast and accurate service, Damalion experts can help you in the formation of an LLC in New York City.
