If you’re looking for a reliable DIY guide for starting an LLC in New York, look no further.
Below you’ll find all the information you need to launch your business and handle any associated costs. Follow each step carefully and your LLC will be established and ready to hit the ground running.
That said, the process can be complex, with various filings and costs, so if at any point you need help, you can hire an LLC registration service.
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Step 1: Name Your LLC
What’s in a name? Quite a bit, actually. Your business name is your New York LLC’s identity, its personality, its reputation. Find a name that sticks in customers’ minds – while conveying your brand qualities – and you’ve struck gold. A unique, memorable name can draw in new customers and keep existing ones coming back.
Your LLC name is going to appear everywhere: business cards, marketing collateral, websites, legal contracts, bank accounts, invoices, directories, and much more. So be sure that it conveys your product, service, brand, and values.
While you can (and should) be creative with your business name, there are certain state requirements that it must follow.
Take a quick break from your name brainstorming endeavors to make sure that your options follow the state’s requirements. An LLC name must contain the business type designator “Limited Liability Company,” or the abbreviations “L.L.C.” or “LLC.” And it cannot use any of the state’s restricted or prohibited words.
You might follow these rules, but your name won’t be valid if it’s already in use. It must be distinguishable from every other business name on record with the Department of State. But what, exactly, defines distinguishability? To make a name unique, you must:
- Use one or more different keywords
- Rearrange the keywords
The following are not considered distinguishable changes:
- Expressing numbers in a different way: as Arabic numerals, Roman numerals, or written words.
- Singular, plural, or possessive forms of the same keywords
- Addition, deletion, or change of special characters, with the exception of: @ $ = % + #
- Addition, deletion, or change of punctuation
- Altering verb tense
- Addition or deletion of one or more articles, conjunction, preposition, or contraction
- Using a derivative of the same keywords
- Changing capitalization or typeface
Consider this: your friend Fanny wants to open a flower shop in Albany, New York. The name she is considering, Flowers by Fanny, LLC is already in use. So she comes up with a new one: Fanny’s Florals and Design, LLC. This name is similar to the original but includes new words, distinguishing it in the Department of State’s records.
Determine the Name Is Available
Of course, you will only need to make distinguishable changes if your name is already taken. Don’t make the mistake of ordering business cards, creating advertisements, and using a name on documents like the Articles of Organization without first confirming it’s available. Use the Department of State’s Business Entity Database to see if there’s an existing business using your desired name. Or, you can send a written inquiry (and a $5 fee) to the following address:
Department of State, Division of Corporations
One Commerce Plaza, 99 Washington Avenue
Albany, NY 12231
Maybe you pegged a distinguishable name right away, or maybe it took some modifications, but either way, once you have a unique name, you can lock it down by filing a name reservation.
Optional: Name Reservation
You may have fallen in love with a particular name, but still have some preparation and paperwork to sort out before starting your LLC, and you’re worried that someone will swipe it in the meantime. To calm your nerves, you can reserve that name in New York for a total of 60 days.
Think about Fanny. After making her name distinguishable, she’s ready to make it official, but if she’s waiting on some paperwork to start her LLC, she can place a hold by sending an Application for Reservation of Name and a $20 payment to:
New York Department of State, Division of Corporations
One Commerce Plaza, 99 Washington Avenue
Albany, NY 12231.
This can be extremely helpful if you aren’t quite ready to start your business. However, if your LLC is ready to go, skip the reservation and use your name on the Articles of Organization, which will register it automatically.
Step 2: Choose a Registered Agent
Fanny’s LLC is quickly taking shape, and if it’s going to operate in New York, she’ll need a go-between for state and legal communications. This is called the registered agent.
A registered agent is a key component of your budding LLC, handling all of its sensitive communication with the state so you don’t have to. But maintaining an agent isn’t just a convenience, it’s required.
In New York, you must use the Secretary of State as your agent. However, you may also designate an additional agent. According to the state’s LLC Act, “in addition to the designation of the Secretary of State, each domestic limited liability company or authorized foreign limited liability company may designate a registered agent upon whom process against the limited liability company may be served.”
LLC taxes, lawsuits, maintenance requirements, and more – the registered agent takes care of it all. If you had to do this yourself, it would pile additional tasks onto your already-full plate. Plus, your agent makes your business available to receive documents even when you’re out of town or away from the office. This is especially important if your physical office is outside New York and you foreign qualified your LLC here.
When you file your Articles of Organization, the Secretary of State will be appointed as your registered agent. If you want to appoint a second agent, you may choose either an individual or a business entity.
Individual as Registered Agent
You may think that an individual registered agent would need specialized training or experience, but this isn’t the case. Anyone can serve as your second registered agent, as long as they are a New York resident and have a physical address in the state.
Registered Agent Service
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It can be a lot easier, though, to use an LLC formation service as your registered agent, so we highly recommend it. Not only will they take care of business formation requirements, but they’ll also include a free registered agent service. Or, if you’d rather start your New York LLC on your own, you can use a national registered agent service to cover your agent duties.
During the life of your LLC, you may, at some point, need to change your registered agent. Perhaps you want to switch from an individual to a professional service, or maybe your existing registered agent resigns. Either way, if you lose your secondary agent at any point, the Secretary of State will handle all of your LLC’s service process.
Step 3: File the Formation Documents with the State
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This is where the LLC formation process kicks into high gear. Let’s check back in with Fanny.
She’s reserved her unique business name and designated a registered agent, and she’s ready to get her LLC off the ground. It’s time for Fanny to take on the most important LLC document: the Articles of Organization. This filing creates a record for Fanny’s Florals and Design, LLC with the New York Department of State, giving it the authorization to commence business in the state.
You can file the Articles of Organization one of four ways: online, by mail, by fax, or in person. So, whether you like the ease of electronic documents or prefer to leave a paper trail, there’s an option for you. But no matter which route you take, the filing costs $200.
Want to complete the whole process from your desk or the local coffee shop? File online. If you haven’t already, you’ll need to create an account with NY.gov.
Hard Copy Filing
Download and complete a paper application. Then include your $200 payment and mail the document to:
New York State Department of State, Division of Corporations, State Records and Uniform Commercial Code
One Commerce Plaza, 99 Washington Avenue
Albany, New York 12231
If you live in Albany and would like to hand-deliver your form, the Division of Corporations, State Records and Uniform Commercial Code is on the sixth floor at the address above.
Access and complete the application above, then fax it to (518) 474-1418. You must include a credit card authorization form with your submission.
The Department of State’s typical processing time for both online and hard copy filings is seven business days. Need to get started ASAP? There are three options for expedited processing: 24-hour service for a $25 fee, same-day service for $75, and two-hour service for $150.
Step 4: Publication Requirements
New York has a unique requirement for LLC formation: publication. Within 120 days of your Articles of Organization filing, you must publish a copy of it in two different publications from its hometown, a daily and a weekly (or two dailies). After each publication prints it once per week for six weeks, your LLC will receive a Certificate of Publication, which you should mail to:
New York Department of State, Division of Corporations
One Commerce Plaza, 99 Washington Avenue
Albany, NY 12231
Skip this step and the state can administratively dissolve your LLC, so even though it might seem difficult, don’t forget it! If you need help, there are a few good New York LLC publication services.
Step 5: Create an Operating Agreement
The operating agreement is the framework that holds up an LLC, the vital underpinning that establishes processes for its procedures, activities, and conduct. Essentially, it serves as your company’s bylaws.
In New York, adopting an operating agreement is a mandatory part of the LLC formation process. Your business must have one on file within 90 days of filing your Articles of Organization. It’s purely an internal document, so don’t worry about submitting it to the Department of State. Instead, file it safely with your other business documents.
Let’s say our friend Fanny sells a percentage of her company to two other owners. Her operating agreement could stipulate how the LLC’s assets would be distributed among them in the case of dissolution. But if she decided to maintain sole ownership, the agreement could be used in court as evidence that the LLC’s assets are separate from her personal ones. These are just two examples, but the operating agreement governs everything from member duties to tax structure.
If you’ve decided to draft an agreement, there are two ways to go about it:
- Write it yourself. Don’t be intimidated by this option. There are plenty of free online templates that serve as helpful guides. You can create an effective document from most of the templates out there, but our favorite free template is from TRUiC.
- Hire an attorney. If you want to be absolutely sure that you don’t miss any important details, an attorney can write or review the agreement for you, ensuring that it complies with state law, includes all necessary information, and avoids the state’s default laws.
What are default laws?
Each state has its own set of generic, baseline laws for how LLCs should operate. These laws, however, only govern matters not included in your operating agreement. Take dissolution, for example. If your LLC ever dissolves, your operating agreement would determine what happens to its remaining assets and debts. But if you fail to include it in the agreement, the state will make that decision for you.
Because default laws are broad and not tailored to your specific business, they often aren’t in your LLC’s best interest, so it’s best to avoid them by being as comprehensive as possible in your agreement.
Step 6: Get an EIN
There’s simply no way to avoid taxes. In fact, it’s illegal to try, so don’t do it.
Federally, LLCs are classified as “pass-through” entities, businesses that don’t file corporate tax returns, but whose owners include income and losses on their individual returns. Still, there are certain circumstances that require LLCs to pay federal taxes, like classifying as a corporation, hiring employees, or selling merchandise. So, in Fanny’s case, if she plans on hiring additional florists and selling bouquets, she will need to apply for an EIN.
The Employer Identification Number (EIN) is a nine-digit number that the IRS will use to identify your company’s tax accounts, so if you pay any business taxes, it’s extremely important to have one. Click the “Do I need an EIN?” link on this page to see if you fall into this category. If so, apply for an EIN one of three ways:
Need to get this done quick? File online – it’s by far the most efficient method. You can only complete the process between 7 a.m. and 10 p.m. EST, Monday through Friday, but you’ll receive your number immediately upon finishing the digital form. Keep in mind that you will need to provide a valid individual taxpayer number (like a Social Security Number) as part of the process.
You might prefer the feel and security of a paper form. In this case, download Form SS-4, complete it, and fax it to (855) 641-6935. You will receive your EIN within four business days.
Or, there’s always trusty postal mail. However, this is the slowest option, as processing typically takes around four weeks. If that doesn’t deter you, fill out Form SS-4 and send it to:
Internal Revenue Service Operation
Attn: EIN Operation
Cincinnati, OH 45999
Okay, so you’ve filed the Articles of Organization, designated a registered agent, adopted an operating agreement, and filed for an EIN. Time to start doing business, right? Sorry, there are a couple of additional steps you may need to take first. But don’t worry, you’re almost there!
Step 7: Taxes, Licensing, & Income Reporting
For all intents and purposes, most LLCs will be official after completing all the prior steps. Still, it’s important for business owners like Fanny to keep looking ahead, as there are certain maintenance requirements to keep a New York LLC running smoothly and in good standing with the state.
Before you start doing business, create a plan for the following potential LLC requirements:
As mentioned earlier, LLCs are almost always classified as “pass-through” entities, which means that they don’t pay income taxes directly to the federal government. That responsibility falls instead on the owners, who must include business income and losses on their personal 1040 tax returns and/or Schedule C. LLCs are flexible with tax structure, so you can choose to have yours taxed like a corporation instead. In this case, it would need to file a separate corporate tax return.
Like your federal income taxes, New York’s income taxes will “pass through” to the LLC owners’ personal returns. LLCs are responsible, however, for an annual filing fee if they have income, gain, loss, or deductions in New York. This tax is based on your business’ gross income with a minimum of $25. File a Form IT-204-LL-I to pay this tax. New York doesn’t impose an LLC “franchise” or “privilege” tax for doing business in the state.
State taxes don’t end with the annual filing fee, though. Depending on your LLC’s circumstances, it may need to make other specific payments. Do you sell merchandise? If so, you’ll need to pay a Sales Tax and Use Tax and electronically file sales and use tax returns. How about hiring employees? If you do, your LLC will be subject to the Withholding Tax and Unemployment Insurance Tax by registering and electronically filing a Form NYS-45 each calendar quarter.
Plus, depending on your LLC’s location, it may owe a local tax to its city, municipality, or county. Consult your local government’s website to find out.
The Articles of Organization may have already made your business legitimate, but your LLC might still need to obtain a license before doing business. This all depends, however, on the type of business you run.
Our friend Fanny would likely need to obtain a Nursery Dealer Registration Certificate from the Department of Agriculture and Markets before doing business in the state. And if she wanted to sell snacks to her browsing customers, she would need a Retail Food Store License. In the same way, your LLC might require certain licensure. The New York Business Express website offers a license and permit search function where you can find out which licenses your company may need.
Certain cities and counties require their own specific licenses on top of any state ones, so you should also check with your local government.
Once you’ve taken all the steps to start your LLC, you’ll be off and running, making deals and growing the company. But when things are moving 100 miles per hour, don’t forget that New York requires all of its businesses to submit one important recurring filing: the Biennial Statement.
After you form your LLC, you’ll need to submit a Biennial Statement every two years in the month during which you formed your business. Each report costs $9 and must be submitted online. If you cannot file online, contact the Department of State via email or fax (518-486-4680) to request a paper form.
Don’t forget to file your Biennial Statement, as it will cause your LLC to lose its good standing with the state. For more information on these reports, see the state’s FAQ page.
And we’ve come to the end. It’s a long process, and not always easy, but the reward is well worth it. If you’ve made it this far, congratulations! Your New York LLC is ready for takeoff. So go ahead and start with that big sale, promotional campaign, or business deal. Maybe you’ll see Fanny out there in the business world, selling her beautiful floral creations.
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Frequently Asked Questions
What are the business tax rates in New York?
If your LLC is taxed like a sole proprietorship or general partnership, you’ll need to pay taxes on your business income at the state’s personal income tax rates (between 4% and 10.9%, depending on your income level). If your LLC is taxed like a corporation, you’re required to pay New York’s 6.5% corporate income tax on your business revenue.
How quickly does New York process LLC formations?
If you form your LLC using paper forms, the Secretary of State should be able to process your LLC’s formation within seven business days. If you’re in a hurry, you can pay an expediting fee to shorten your turnaround time: 24-hour for $25, same-day for $75, and two-hour for $150. Or, you could form your business online, which produces much faster turnaround times, often processing your formation the same day you file it.
How many small businesses are there in New York today?
The state of New York is home to more than 610,000 small businesses. Entrepreneurs of all backgrounds and business types find that New York is a great place to own and operate a small business.
What are the top small business resources and websites in New York?
The New York chapter of the Small Business Development Center is a great place to start, as they offer a wide variety of tools and resources for New York LLCs. The U.S. Small Business Administration’s New York District Office is another valuable resource, and the state’s small business resource page also has plenty of good info.
Should I form my LLC in New York, or choose a state like Delaware or Wyoming?
Some people like to form their LLCs in states with favorable legal settings. For instance, Delaware is often seen as the most business-friendly state, as it has an entire court system that’s dedicated solely to business matters. As for Wyoming, this state has some of the most generous anonymity laws for LLC ownership.
However, for most people, your best option is to simply form your business in your home state. Forming in a different state can be a tremendous hassle, and it can add some unnecessary complexity to tax issues as well.
Where Can I Learn More About New York’s Licensing and Permitting Requirements?
Chances are, you’ll require at least one license or permit to operate your LLC in compliance with New York state law. For more information, we recommend the state’s “Licenses” page (simply sort by “Business” to narrow down the search field).
Do I Need to File a Biennial Statement for an LLC in New York?
Yes. Whether you operate a foreign or domestic LLC in this state, you are required to file a New York LLC biennial statement for an LLC operating here.
What Is the Total Expected Cost of Operating an LLC in New York?
The overall costs of operating a New York LLC can vary considerably based on the specifics of your business. However, we created a helpful guide to help you identify and plan for every expense your LLC will face in this state.
Should I Use an LLC Service, Hire an Attorney, or Foreign Qualify My Own LLC?
The answer to this question lies in your personal preferences, but we can give some general pointers. An attorney will cost the most by a mile, but also provides expertise you won’t find with the other options. The DIY route is free of charge, but can require quite a bit of legwork and provides no peace of mind that the process is being completed correctly.
Using an LLC service means your business will be foreign qualified by professionals who know what they’re doing, while also costing significantly less than a lawyer. This “best of both worlds” attribute is what makes LLC services our preferred option.
How Do Online LLC Services Work?
Using an online LLC service removes much of the hassle from the foreign qualification process. With these services, all you need to do is provide them with the name, location, and industry your business operates in, along with some info about yourself and your registered agent.
The service then files your Articles of Organization with the state to register your LLC to do business in New York.
Start an LLC in All 50 States
We break down the LLC formation process in detail in all 50 states. View all of our LLC formation guides below.