In this video, I'm going to explain how to form a New York LLC in eight easy steps.
I'm Priyanka Prakash, senior staff writer and small business expert at Fundera.
An LLC can be the perfect legal structure for a small business.
It offers tax advantages, flexible management options, and liability protection in one package.
So how can you take advantage of these benefits?
Keep listening.
I'll cover the rules in New York for setting up a new LLC, as well as operating an existing
LLC in New York.
Step one is to choose a name for your LLC.
This is probably also the funnest part of forming your new business.
You'll need to get a little creative and choose a name for your New York LLC that hasn't already
been taken by another registered business entity.
Your business name must end with LLC, with or without periods, or “Limited Liability
Company.”
And unless you've received permission from the state of New York, you cannot include
certain words in your LLC name that could mislead customers, such as “bank” or “insurance.”
The New York Department of State's Division of Corporations has a full list of restricted
words on their website, and to make it easier to find an available business name, the Department
of State also has a searchable online business name database.
If a name that you like is available, you can reserve it for up to 60 days by mailing
a hard copy of an Application for Reservation of Name to the Department of State.
Unfortunately, this is not something you can file online in New York.
However, you can find other important information, such as filing fees and filing addresses,
on the Department of State's website.
Now, once you have a legal name for your LLC, the state requires you to conduct business
only using that name.
If you use another trade name in marketing, for example, you'll need to mail a Certificate
of Assumed Name form to the Department of State.
Step two is to provide an address for receiving official business mail.
Now, the Registered Agent for every New York LLC is automatically the New York Department
of State.
This means that if your business is sued, receives an important tax notice from the
IRS, or other government mail, the Department of State will be the first to know, and they'll
forward those papers to you.
In your LLC Articles of Organization, which we'll talk about in a minute, you'll need
to provide the address to which the Department of State should forward that paperwork.
This is typically your business's primary address or principal place of business.
Just to make things really clear, many other states require you to name an official registered
agent, but this is not true in New York.
The New York Department of State automatically serves as your registered agent, and you just
need to tell them where to mail a copy of any documents they receive.
Steer clear of companies that claim that you need to name another registered name In New
York.
They're probably just trying to take more money from you.
Step three is to file your Articles of Organization with the Department of State.
This is also the step that makes your business official.
In order to complete the Articles of Organization, you'll need your LLC’s official business
name, address, and the signature and name of the person completing the form.
You can submit your Articles of Organization by mail or file online at businessexpress.ny.gov.
The Articles of Organization come with a filing fee, so make sure you have a check or credit
card handy as well.
If your Articles of Organization are accepted, the state will send you a filing receipt within
about seven business days.
You should store this receipt with other important business records.
Step four is to obtain New York business permits.
It probably comes as no surprise that the state of New York places a lot of regulations
on business.
Many types of businesses require professional licensing from the state, including real estate
agents, healthcare professionals, security guards, barbers, and childcare businesses
just to name a few.
Depending on the type of business you have, you might also need a sales tax permit, zoning
permits, and environmental permits.
To help out, the Department of State has a handy tool called business Express.
Put in details about your business, and you'll get a checklist of regulations that you have
to comply with and a list of permits that you have to comply with.
For example, here are details for launching a restaurant LLC in New York City.
Step five is to publish notice of your LLC formation.
New York is just one of a few states in the country that require new LLCs to publish notice
of formation in a local newspaper.
Within 120 days after filing your Articles of Organization, you'll need to publish in
two local newspapers a copy of the Articles of Organization or a notice saying that your
LLC was formed.
You'll have to do this once per week for six weeks in a row.
The newspapers should run in the county in which your business's main New York office
is located.
Once the six weeks are up, the publisher of each newspaper will give you an affidavit
of publication.
You'll need to attach those affidavits to a form called the Certificate of Publication
and submit them to the Department of State.
You can download the Certificate of Publication from the New York Department of State's website,
but you must mail the form with a filing fee.
No online filing is available here either.
Step six is to create an LLC operating agreement.
New York is also one of a few states that require LLCs to have an operating agreement.
An operating agreement outlines how your LLC will be managed and contains information on
each owner's responsibilities, profit share, and voting rights.
This is an important document will help prevent disagreements among owners in the future,
and it provides a blueprint for how your business will be run on a day to day basis.
Step seven is to keep your LLC active.
The most important part in keeping your LLC active is to pay taxes.
Individual LLC owners in New York have to pay personal income taxes on their share of
the LLC’s income.
In addition, New York State assesses an annual filing fee on most single-member and multi-member
LLCs.
This annual fee ranges from about $25 to $4,500 depending on the income from your LLC.
The tax is due on the 15th day of the third month following the close of the tax year.
That's March 15 for most New York LLCs.
There are also other steps you should take to keep your LLC active, such as opening a
separate business bank account and using a business credit card that's dedicated for
business purchases.
The last step is to comply with federal requirements.
New York LLCs have to follow both state and federal requirements.
For example, this means paying federal taxes on time, and if you employ workers, getting
a federal employer identification number or EIN.
You'll need your EIN when filing federal taxes and for other business transactions like opening
a business credit card.
And that's it.
Those are the eight steps to forming an LLC in New York.
If you want more of this process taken off your hands, consider using an online business
formation service.
Incfile will help you form your LLC for free.
You just have to pay state filing fees, which you'd have to do anyway even if you do things
on your own.
For more information on business formation and running a business, go to fundera.com.
You can also visit youtube.com/fundera loans, and subscribe to our channel for more videos.
Thanks for watching everyone, and let us know if you have questions in the comments.