Think about your LLC a year from now: raking in profits and taking New York by storm. You have big plans, but before your business can officially take off, you’ll need to make a bit of an investment.
And we’re not talking about renting office space or paying employees – before you sell a single product, there are startup costs associated with launching an LLC in New York.
While you’re making plans and dreaming big, make sure that you consider all the possible costs associated with starting an LLC. To help you out, we’ve compiled the most common New York startup fees here.
Quick Note: If you’d like to keep your costs of starting an LLC as simple and low as possible, consider hiring ZenBusiness – a reliable business formation service. To get a better idea of the value they offer and how it works, we compared them to the two most well known services:
Bare Minimum Cost to Start an LLC in New York
- Optional: LLC Name Reservation Fee
- $20 for paper filings
- Required: Articles of Organization Fee
- $200 for online or paper filings
- Required: Certificate of Publication
- Varies, depending on the newspaper. See below.
- Optional: LLC Name Reservation Fee
Overall New York LLC Formation Costs
LLC Name Reservation Fee
Have a great name in mind? Is it so great that you think someone else might take it? A name reservation might be just what you need. Reserving a business name isn’t required to start your LLC, but if you’re not quite ready to file your Articles of Organization, it’s a nice option. Filing an Application for Reservation of Name and paying the $20 fee will place a 60-day hold on your name, which you can renew twice by paying additional $20 fees. The Articles of Organization, however, automatically registers your name, so if you’re ready, it’s better to skip the reservation and start there.
Articles of Organization Fee
This is the big one, the most important (and most expensive) form that you’ll file to start your New York LLC. By filing the Articles of Organization, you are formally putting your business on record with the Department of State. At $200, it isn’t cheap, but considering the filing’s importance, it’s a $200 well spent. If you’re in a hurry, the state also offers three expedited processing options: 24-hour for $25, same-day for $75, and two-hour for $150. The Articles of Organization is available online and in hard copies. It’s a one-time filing, so this fee won’t come up again.
Business and Professional Licenses
Not all LLCs need additional licensure, but some do. It all depends on the type and location of the business. For example, real estate brokers must apply for licensure through the state’s Real Estate Board. Visit the Division of Licensing Services website to see all professional licenses. On top of that, cities and/or counties often have their own specific licensure requirements, so be sure to check with your local government as well.
New York has a unique requirement for its LLCs: every new LLC must publish its Articles of Organization or a notice of its formation in two newspapers from its home county. Then, it must send an affidavit of publication with a completed Certificate of Publication to the Department of State. Publication costs vary, depending on the county, and LLCs with registered offices in New York City will pay significantly more than those in smaller cities.
LLC Formation Service
Starting an LLC can be a complicated and time-consuming process. If you want to spend less time on paperwork and more time planning your business, you might opt for an LLC formation service. These services take care of the registration process for you, so you don’t have to spend the time on research, paperwork, and filings.
Most of these services (like ZenBusiness and Northwest) offer basic LLC formation service like Articles of Organization filing, tax consultations, and phone/email support for a flat rate, with options to pay more for premium packages with premium services like Employer Identification Numbers, Operating Agreements, and expedited filing.
Registered Agent Service
Appointing a registered agent is an important part of your LLC formation process. Your registered agent is responsible for handling sensitive legal and tax documents and keeping your business compliant with New York business law. In short, you need an agent you can trust.
While you can be the registered agent for your own LLC, this puts pressure on you to keep up with business filings and potential legal disputes. Sometimes it’s better to hand off that responsibility to a professional. A registered agent service ensures that your annual reports and other forms are filed efficiently and on-time, saving you from the penalties of delinquent filings and the stress of having to do it yourself.
Plus, if you’re a New York City company, using registered agent service based in another city will save you money by allowing you to publish your formation notices in less expensive newspapers.
Not all registered agent services are equal, so you’ll need to be careful in choosing one. Fortunately, we’ve done some research for you, and we recommend Northwest Registered Agent. In addition to registered agent services, Northwest also handles LLC formation — and they’ll include a registered agent free for one year when you form your business with them. We think they’re the most reliable choice, but if you’d like to evaluate all your options, check out our Best Registered Agent Services guide.
If you have questions or concerns about the LLC formation process or if it’s the best business structure for you, sometimes it’s best not to take chances and consult an attorney. They’re not cheap, but they can provide essential business advice, professional filing assistance, and peace of mind.
Some attorneys offer free consultations (usually 30-60 minutes) but will charge by the hour after that. On average, business attorneys charge between $150-350 per hour. Some will offer a flat rate for setting up an LLC, which can range from $500-2000.
Cost variations depend on the experience and location of the lawyer. Research them using a site like Avvo and you’ll have all the information you need in one place. You can search, compare, and contact thousands of New York business attorneys through Avvo’s database, ensuring that you’ll find a good fit for your LLC.
Foreign Qualification Fee
This only applies if your LLC was formed in another state and is now expanding into New York. For foreign LLCs, the “Application for Authority,” takes the place of the Articles of Organization.
All foreign business entities are required to foreign qualify in New York, or they could incur some pretty severe penalties. Filing the Application for Authority costs $250, and you can do so by downloading and mailing a paper form. While it’s somewhat pricey, you only need to file the Application for Authority once, so that $250 fee is only required upon startup.
LLC Biennial Fees
After all the startup fees, there are maintenance fees to consider. Fortunately, they won’t break the bank. After starting your LLC, the state mandates that you file a Biennial Statement every two years on the LLC’s anniversary month. The fee for each Biennial Statement is only $9, and you can file them online using the e-Statement Filing System. Read more about Biennial Statements on the Division of Corporations, State Records & UCC website.
Because LLCs are classified as “pass-through” entities by the federal government and New York doesn’t require them to pay franchise taxes, your company will only need to pay state business taxes under certain circumstances:
- If your LLC hires employees, it will be subject to withholding and unemployment insurance taxes, and you’ll need to file a Quarterly Combined Withholding, Wage Reporting, and Unemployment Insurance Return online each quarter.
- If your LLC sells merchandise, it will owe a sales and use tax, for which you’ll need to register using the New York Business Express. You’ll also be required to file Sales and Use Tax Returns.
- If you’ve elected to have your LLC taxed as a corporation, it will need to pay a state franchise tax. This means it will owe the highest out of either the business income tax, business capital tax, or fixed dollar minimum tax. See how to calculate it here.
What If I Don’t Pay?
Looking at all these fees, you might be thinking: how can I pay less? While you might be tempted to look for loopholes or find a way around them, this could cause you bigger problems in the future.
Right off the bat, if you fail to submit an Articles of Organization or Application for Authority along with the appropriate fee, you will not be authorized to transact business in the state and can be fined for doing so. Regarding LLC maintenance, if you miss a Biennial Statement, your LLC will be labeled “delinquent,” out of good standing with the state. Businesses without good standing cannot foreign qualify in most other states, apply for many business loans, renew professional licenses, and more.
Paying your taxes late or not at all will result in monetary fines depending on the type of tax, the amount due, and how overdue it is. The Department of Taxation and Finance website has a “Penalty and Interest Calculator” that allows you to determine how much you’ll owe.
Planning Your Expenses
By now, your budget spreadsheet might be looking a little crowded, but have no fear! Most of these are one-time fees that you won’t have to worry about again. Plus, with all these on the books, there won’t be any surprise costs when you register an LLC in New York.
Soon, you’ll have these fees behind you and you’ll be forging ahead, growing your business and earning profits. As you do, make sure to keep up with the few recurring fees – like Biennial Statements – so your business doesn’t fall out of good standing.