Starting an LLC in New York FAQs
Why Start an LLC in New York?
If you’re in New York, or planning to move your business to New York, there’s an array of great reasons for starting an LLC in New York state. Boasting over 450,000 small businesses, New York is a highly business-friendly destination. Whether you’re an LLC or a corporation, New York is a hub for reaching out to national and global markets.
(image source: https://commons.wikimedia.org/wiki/File:Seal_of_New_York.svg)
An LLC, or Limited Liability Company, is a type of private limited company in the United States, which is any type of business entity in private ownership. This means the company is owned by its founders and management and is therefore not beholden to shareholders. So what are the benefits of starting an LLC in New York?
Compared to other business structures, LLCs have a relatively simple, flexible, low-cost structure that offers tax benefits and personal liability protection. See our ultimate guide for How to Start an LLC for a full breakdown of the advantages of LLCs and how they compare to other business structures.
So if you’ve ever wondered how to get an LLC in NY, wonder no more. This simple guide for how to start an LLC in New York shares all the important steps, requirements, state fees and costs you’ll need during the LLC setup process so you won’t feel lost along the way.
What are the Steps to Starting an LLC in New York State?
Starting an LLC in NY may feel daunting, but we promise it’s not. There are 8 simple steps to starting an LLC in New York:
Step 1: Name Your New York LLC
The first step to forming an LLC in New York is to come up with a name that is not only distinct and memorable, but also one that is available and adheres to New York naming rules. Your LLC’s name cannot have the same name as an existing business in New York. Search the New York Division of Corporations’ Corporation and Business Entity Database to ensure that your intended name is not already taken.
(image source: https://blog.hubspot.com/sales/business-name-ideas)
If your name is available and you’re not quite ready to submit your registration documents, you can file a New York business name reservation application for $20, which reserves your name for 60 days. Once you’ve established that your name is available, there are a few naming requirements for LLCs in New York:
- The name of your business must include the words: Limited Liability Company, LLC, or L.L.C.
- Consult the NY Department of State’s list of restricted and prohibited words and phrases. This comprehensive list details which terms require additional documentation and licensing in order to include them in your LLC name.
- Your LLC’s name may not contain terms used to name a government agency, such as the FBI, CIA, etc.
Step 2: Designate a Registered Agent
If you want to form an LLC in New York, you’ll need a registered agent. A Registered Agent acts as an intermediary for receiving official legal documents and passing them on to the LLC owner. All LLCs in the U.S. are legally required to designate a Registered Agent. In New York, your LLC’s Registered Agent must be the NY Secretary of State.
You may name an additional New York resident or registered agent business as your LLC’s agent, but it is not required. A Registered Agent can be any person over the age of 18 who is available during regular business hours at an address located in the state where the LLC is registered. Submit to the New York Department of State a New York mailing address to which legal documents can be forwarded by the Secretary of State.
See our Articles of Organization LLC Template to see exactly what you should include.
Step 3: File Articles of Organization (or similar document)
Once you have a name, a Registered Agent, and a New York mailing address, the next step to setting up an LLC in NY is to submit official formation documents, also known as Articles of Organization (or similar document). In order to complete Articles of Organization (or similar document), you’ll need to know: your business’s name, address, purpose, management strategy, intended duration, and the Registered Agent’s contact information.
There’s a $200 filing fee for domestic LLCs and a $250 filing fee for foreign LLCs. If it’s accepted, you’ll receive a certificate of formal registration. See our Articles of Organization LLC Template to make sure you don’t miss anything.
Step 4: Publish a Notice of Formation
If you want to start an LLC in New York, you’ll also need to inform the public. Within 120 days after the effectiveness of the initial Articles of Organization (or similar document), you’re required to publish a notice of formation in two newspapers of the county where your LLC’s office is located once a week for six consecutive weeks. The county clerk will designate the newspapers in which your notice will be published. One newspaper must be printed daily and the second newspaper must be printed weekly.
Once the notices have run, the newspapers will provide you with affidavits of publication. Use these affidavits to complete and file the Certificate of Publication with the Department of State ($50 filing fee). Failure to comply with the publication requirement will result in the suspension of the LLC’s authority to carry on, conduct or transact business in New York.
Step 5: Create an Operating Agreement
Creating an Operating Agreement is an essential step to setting up an LLC in New York. An Operating Agreement is a written document that outlines and ensures that all members understand and agree to their designated rights and responsibilities.
The agreement should include all relevant information relating to your LLC’s operations, such as:
- LLC’s name and principal address
- Duration of the LLC
- Name and address of the registered agent
- Articles of Organization (or similar document)
- Purpose of the business
- Members and their contribution
- Manner in which profits and losses will be distributed
- Process for adding or dismissing members
- Indemnification and liability clauses
- How the LLC will be managed
While not every state requires an LLC to create an Operating Agreement, New York does. Members of an LLC in New York are required to draft and adopt a written Operating Agreement within 90 days after filing the Articles of Organization (or similar document). See our LLC Operating Agreement Template to make sure you’re including all the essentials. An attorney should be consulted for more complex operations.
Step 6: Receive a Certificate From the State
The next step for how to start an LLC in NY is receiving the certificate of formation. After an LLC’s formation documents have been filed and approved, the state will send you a certificate that formally confirms the existence of your LLC.
The state will mail this certificate to the New York mailing address you provided. It may take up to 7 weeks to receive your certificate. This certificate will enable the LLC to get an Employer Identification Number (EIN), business licenses, and business bank account.
Step 7: Get an Employer Identification Number
The next step to starting an LLC in New York is getting your tax ID number. The Internal Revenue Service (IRS) will assign you an Employer Identification Number (EIN) in order to identify your LLC for taxes.
An EIN, sometimes referred to as a Federal Employer Identification Number (FEIN) or Federal Tax Identification Number (FTIN), is nine digits and enables an LLC to file and manage taxes at the state and federal level, open a business bank account, and hire employees. You can obtain an EIN for free via the IRS online portal.
Step 8: File a Statement of Information Biennially
Now that you know how to apply for an LLC in New York state, you need to know how to maintain your LLC. Once your LLC has been established, you’ll file a statement of information every other year by the end of the anniversary month that your business was formed. This statement ensures that the state stays up to date on the contact information for your LLC. You can submit a statement of information online and there is a $9 filing fee.
You will need to know your Department of State Number, also known as your DOS ID Number, which can be found on the Filing Receipt that the state provides you after Articles of Organization (or similar documents) are filed. You may also visit the state’s online database to perform an LLC name search to find your DOS Number.
NOTE: Filing Errors
Even if you do your due diligence and thoroughly research how to set up an LLC in NY, mistakes still happen. It’s in your best interest to get it right the first time, of course, but in the event that you register an LLC in NY and then discover an error in your paperwork, correct it immediately by filing a Certificate of Correction.
Mail the corrections paperwork along with the $60 filing fee to the New York Department of State, Division of Corporations, One Commerce Plaza, 99 Washington Avenue, Albany, NY 12231.
What are the Costs of Starting an LLC in New York?
The cost to set up an LLC in NY is pretty straightforward. Here’s a roundup of the costs we’ve discussed so far for creating an LLC in New York:
- Business Name Reservation filing fee: $20
- Articles of Organization filing fee – $200 domestic; $250 foreign
- Notices of Formation: fees determined by the newspapers in your LLC’s county
- Certificate of Publication filing fee: $50
- Biennial Statement of Information filing fee – $9 filing fee
Does Collective Help with Starting an LLC in New York?
See? That wasn’t so hard! You now know the steps for how to start an LLC in New York.
If all the steps, forms, fees, and costs sound like too much work, don’t worry. Collective offers a smarter, more affordable way to get your LLC set up and running. We take care of your LLC formation, monthly bookkeeping, accounting, taxes, and more.
Start your LLC with Collective and find out how much you could save.