How to form an LLC in New York.
If you are interested in starting
an LLC in the Empire State, you are not alone.
New York has the third largest economy in the country
and one of the highest rates of newly formed LLCs.
Every state has slightly different requirements
for forming an LLC.
Follow along closely to learn the required steps
for creating your own Limited Liability Company
in the state of New York.
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Let's start by looking at the six basic requirements
to form an LLC in New York on your own.
You can also find these steps in more detail
on our website linked in the description below.
One, name your LLC.
Every state has its own rules
about what kind of names are allowed for LLCs.
In general, you will need to
observe these naming guidelines.
Your name must include the phrase Limited Liability Company
or one of its abbreviations, LLC or L.L.C.
with a period following each letter.
Restricted words such as 'bank', 'attorney',
'law office', et cetera may require additional paperwork,
and may also need a licensed professional
to be part of the LLC.
Your name cannot include words that could
confuse your LLC with a government agency
such as 'FBI', 'treasury', 'state Department', et cetera.
You cannot use a name that has already been registered.
To see if your name is available in your state,
you'll need to do a name search.
This free service is available
on your state's Secretary of State website.
Check out our free guide for finding
the direct link to your state.
We also recommend that you check to see
if your business name is available as a web domain.
Even if you don't plan to make a business website today,
you may want to buy the URL
in order to prevent others from acquiring it.
Two, use the default statutory agent.
In New York, the Secretary of State
acts as the statutory agent for service of process
for all New York LLCs by default.
In this case, the Secretary of State
will forward documents and service of process papers
directly to your LLC's principal address.
Your registered agent will help
remind you to file the necessary reports.
Failure to properly maintain your LLC
can result in fines and dissolution.
So, this assistance is valuable.
Three, file the Articles of Organization.
To register your New York LLC,
you will need to file the Articles of Organization
with the State of New York.
This can be done online or by mail.
You will need to state whether your LLC
will be member-managed or manager-managed.
Member-managed means all members
of the LLC manage the company.
This is good for small organizations,
where everyone is involved in day-to-day operations.
The second option is manager-managed,
where individuals are appointed to manage the LLC.
This is appropriate for larger organizations,
where not everyone is involved
in the day-to-day affairs of the business.
Four, publication requirement.
New York requires that within 120 days of formation
all LLCs publish a copy of the Articles of Organization
or a notice related to the formation of the LLC
in two newspapers, one weekly and one daily.
The newspapers must be approved
by the local county clerk of the county you designate
in your Articles of Organization.
After publication, the printer or publisher
of each newspaper will provide you
with an affidavit of publication.
You must submit your Certificate of Publication
along with your affidavits of publication
to the New York Department of State,
Division of Corporations.
After the publishing requirements are met,
you can change the location of your principal office
to anywhere in New York State.
You do not need to publish additional notices.
Five, create an operating agreement.
Although not every state requires it,
you should always create an operating agreement
to establish ownership terms and member roles for your LLC.
This foundational document is the core of your LLC
and will help you maintain your organization
as well as further establish
your LLC as a separate legal entity.
There are six main sections of an operating agreement.
Organization outlines when and where
the company was created, who the members are,
and how the ownership is structured.
Management and voting addresses
how the company is managed as well as how the members vote.
Capital contributions covers which members
financially support the LLC and how more funds
will be raised in the future.
Distributions outlines how the company's profits and losses
are shared among members.
Membership changes describes the process
for adding or removing members
as well as if and when members
can transfer their ownership shares.
And dissolution, which explains the circumstances
in which the LLC may be dissolved.
An operating agreement is an internal document.
It does not need to be filed with the state.
However, it should be updated every time
there is a change in membership
or management at the company.
You can download a free sample operating agreement
or create a custom one using
our free operating agreement tool at HowtostartanLLC.com.
Six, Obtain an EIN.
Lastly, you'll need to get
an Employer Identification Number, or EIN, from the IRS.
Also known as a Federal Tax Identification Number,
your EIN is like a social security number for your LLC
and is how the IRS tracks your business for tax purposes.
An EIN is also necessary to open a business banking account
and legally hire employees.
EIN's are free of charge, and can be obtained
from the IRS online or through the mail.
And with that, you will have formed
a New York LLC on your own.
Keep in mind, however, that New York's newspaper
publication requirements can cost $1,500 or more
if your LLC's principal address is in New York City.
To reduce publication costs,
entrepreneurs have developed various strategies.
A registered agent service located outside the city
allows an LLC to use the registered agent's address
as the principal address,
which greatly reduces the cost of publication.
There is also the added benefit of privacy:
New York's LLC publication requirements
mandate that your principal LLC address be publicly shared.
Hiring a professional registered agent service
will allow you to use their address instead of yours
which will protect your personal privacy.
In addition, a hired registered agent
helps with getting your reports filed on time,
helps you stay organized by keeping
your business mail separate, and is available
at all regular business hours to accept official mail
and legal papers on your LLC's behalf.
Now that you have seen the different requirements
and ways you can form an LLC in New York,
visit our site and take some time
to research your options and establish
a solid foundation for your business activities.
HowtostartanLLC.com has full details
on how to form an LLC in New York
and the full publication guidelines.
Now you know all the steps to form an LLC in your state.
For a more detailed guide, got to HowtostartanLLC.com.
You can also create an operating agreement
and use our business plan tool free of charge.
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And if you have questions or encounter any roadblocks,
leave a comment below.
Good luck on starting your small business.
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