Set up your LLC without the hassle.
Click on “Get Started” so we can check
if your business name is available in New York!
Establishing your business as a limited liability company provides credibility and certain legal protections, regardless of what state you file in. Setting up an LLC in New York comes with some additional documentation and higher fees than other states require. For many business owners based here, though, incorporating as an LLC in New York still makes the most sense. Not having to worry about inter-state paperwork keeps the process of filing and maintaining your business’s status simple.
Below is a step-by-step guide on how to form an LLC in New York, along with state-specific details that will help ensure your filing process goes smoothly.
Here are the steps you’ll need to take in order to get your LLC in New York.
Below, you’ll find a detailed explanation to walk you through each step.
Begin by choosing a name for your limited liability company. Whether you already have a business name or are starting a new venture, the name has to comply with some basic New York business naming restrictions.
All LLC business names in New York must meet the following stipulations:
The State Senate has more information regarding LLC names in New York available. A searchable database of all names is also available from the Department of State.
Of course, your business name should also be highly visible online. Many web domain hosts offer convenient URL searches, which make it easy to confirm that a URL of your business’s name or a derivation is available.
Your chosen business name will be officially registered with the state when you file Articles of Organization (see Step 2 below). Because these articles are needed to reserve and register your chosen name, don’t wait too long between settling on a name and registering the business under it.
Filing for a doing business as (DBA) allows your business to advertise and operate under a different moniker than what the business’s official name is. In New York, DBAs are registered by filing an assumed name registration.
Whereas sole proprietor DBAs are filed with county clerks in New York, assumed names for LLCs are filed with the Department of State. To file, submit Certificate of Assumed Name (Form DOS-1338-f) with Albany.
Filing options for the certificate include:
There isn’t currently an online option for filing a Certificate of Assumed Name.
The fees associated with filing for an assumed name are affordable, so long as a rush turnaround isn’t required. Basic fees are $25 for filing the Certificate of Assumed Name, and $10 for each certified copy of the document. Rush fees are $25 for 24-hour processing, $75 for same-day processing, and $150 for 2-hour processing.
Business names in New York can also be trademarked with the Department of State, and doing so provides additional protection against another business owner registering a similar name. You may also trademark an abbreviation of the name in some cases.
To register a trademark for your limited liability company, file an Original Application to Register a Trademark (Form DOS-0241-f-i-a with the DOS. The form must be accompanied by three specimens (examples) of the trademark being used in the real world, although the actual goods that the specimens are used on shouldn’t be sent in.
The application should be mailed to New York Department of State, State Records, One Commerce Plaza, 99 Washington Avenue, Albany, NY 12231. Note that this department address is different from the one used for assumed name applications, and each document should be sent to the appropriate department to avoid delays. Additionally, there isn’t a fax nor an online filing option for trademarks.
The fee is $50 for each classification claimed, and the trademark lasts for 10 years if approved.
Along with filing a state trademark, filing a federal trademark may also be advisable if your business operates outside of New York or has plans for expansion. Federal applications are filed with the United States Patent and Trademark Office.
An article of organization is the legal document that establishes your limited liability company with New York State. All LLCs in New York are required to file articles.
A non-refundable fee of $200 is charged for filing LLC articles of organization in New York. Expedited processing is available, at a rate of $25 for a 24-hour turnaround, $75 for same-day, and $150 for two hours. Any expedited fees should be made via a second payment.
In addition to the registration fee, LLCs should also be prepared to pay for publication. Publication costs can range from $100 to $2,000-plus, depending on where in the state your business is located. The state charges an additional $50 for a publication certificate. (see Requirements for details on publication.)
New York’s publishing requirement is a step that few other states have. While it’s relatively easy to meet this standard, the requirement can substantially increase the cost and time of forming a limited liability company.
Businesses must publish a Notice of Formation in two local newspapers. Local papers must be located within the county where the LLC’s address is, and they must include one daily and one weekly paper. The papers also have to be approved by the county clerk. Potential applicants should check with their LLC’s county clerk for a list of approved print media.
The notice must be published once per week for a total of six consecutive weeks. The full six-week run has to be completed within 120 days of filing articles of organization.
Once the notice’s publication run is finished, the paper will issue an Affidavit of Publication to the filer. The two affidavits can then be filed along with a Certificate of Publication (form DOS-1708-f). All three documents are to be sent to New York Department of State, Division of Corporations, One Commerce Plaza, 99 Washington Avenue, Albany, NY 12231.
The notice’s content also must meet strict requirements. The following is a general format that broadly meets requirements:
“[Name of LLC] LLC. Arts. of Org. filed with the SSNY on [Date]. Office: [County]. SSNY designated as agent of the LLC upon whom process against it may be served. SSNY shall mail copy of process to the LLC, [ADDRESS]. Purpose: Any lawful purpose.”
If a registered agent is used, “SSNY designated” can be replaced with something like “[Name of Registered Agent] designated.”
Publication costs vary greatly around the state. Newspapers in some rural counties may charge $100 or less for a 6-week notice run, while Manhattan-based papers might charge $2,000 or more for the same amount of time. For businesses that will be located in New York City and those using a registered agent, they may be permitted to publish a notice in a different, cheaper county.
The fee for filing a Certificate of Publication is $50, paid to the state.
To actually file articles of organization, submit Articles of Organization (Form DOS-1336-f) to the Department of State. The articles can be submitted by:
A registered agent acts as the primary legal contact for an LLC. The registered agent receives notice of any legal action against the business, and they may receive other communications from the state. Among these other communications are formation documents, service of process information, and tax documents.
The Secretary of State acts as the default registered agent for LLCs in New York, unless another entity is specified. An individual or registered agent can be alternatively chosen.
Any person affiliated with a business can serve as a registered agent, and identifying yourself or someone else can be the cheapest choice if publication costs aren’t high in your county. Of course, you must personally handle any legal communications that are sent to your business.
A registered agent service can manage all of a registered agent’s responsibilities on an LLC’s behalf. Business owners choose registered agent services for two main reasons: privacy and publication cost savings.
When using a registered agent service, the service’s address is listed as where legal communications get sent. This helps keep the business’s actual address unknown to the general public.
Using a registered agent service also allows LLCs to publish their Notice of Formation in the county of the service. If a business is located in a county where publication costs are high, selecting a service that’s located in a lower-cost county can result in substantial savings.
For example, a Manhattan-based business might save hundreds or thousands of dollars by going with a service that’s located Upstate. Even businesses located in Upstate cities might save by using a service that’s located in a less populated county.
The purpose of an operating agreement is to legally outline the ownership structure and operations of an LLC. Creating a comprehensive operating agreement not only clearly defines rights and responsibilities at the outset, but can also lessen the risk of conflict in the future.
A well-composed operating agreement will cover organization, management, voting, contributions, distributions, dissolution and changes in stakeholders. Other details may be included also.
New York is technically one of the few states that require an operating agreement, although the issue is somewhat muddled within state law. The requirement for an operating agreement is clearly found in New York Consolidated Laws’ Section 417(a), but the Department of State notes that the law is silent on what (if any) consequences follow for LLCs that fail to draft an agreement.
Regardless of consequences, you should draft an operating agreement because it’s technically required and it is considered a best practice. The agreement can be written or verbal, and it doesn’t get filed with the state — it’s an internal document that’s meant to help define your LLC.
Since the consequences of not having an operating agreement are undefined, the Department of State is silent on what must be included in an agreement. The department only says that it can’t offer legal advice in this area.
As a general guideline, the topics noted above should be included in an LLC’s operating agreement.
The IRS requires all LLCs to file for an Employer Identification Number (EIN), regardless of what state the business files in. Sometimes an EIN is referred to as a federal employment identification number (FEIN) or a federal tax identification number (FTIN).
An EIN is a nine-digit number that uniquely identifies a business for tax and other purposes. It’s necessary to file federal and state taxes, open business bank accounts, hire employees, and some other actions. The number functions much like a corporate Social Security Number.
EIN applications are sent directly to the IRS, and are free to file. You can easily apply by filling out an Application for Employer Identification Number (Form SS-4). The form can be submitted:
Applying online is the most convenient and fastest method. A series of prompts will take you through the form’s questions, and you’ll receive an EIN immediately after successfully finishing the prompts.
Once your limited liability company is set up, you’ll need to comply with multiple state tax requirements.
Unlike other business structures, LLCs generally don’t pay any taxes themselves. They might have to make remittance payments on taxes received from others, but income from the business is normally paid by the individual recipients.
How you and other business owners are taxed depends on whether you elect to be taxed as an LLC or an S Corporation. The choice can have a dramatic impact on LLC owners’ tax bills in some cases:
Not paying FICA taxes results in a 7.65 percent savings on any distributions received. FICA taxes encompass a 6.2 percent Social Security tax and a 1.45 percent Medicare tax, both of which are assessed on gross wages. (FICA stands for the Federal Insurance Contributions Act.)
In order to operate under S Corp tax status, you’ll likely have to spend on bookkeeping, accounting and payroll services. Therefore, your LLC will have to make a minimum amount of distributions in order to offset these additional costs. An accountant can help you calculate exactly what that minimum amount is for your business’s particular situation.
The tax savings afforded by S Corp tax status apply to only federal FICA taxes. States don’t charge these taxes.
What tax forms your LLC must file depends on how it’s structured and its tax election:
Income tax must be paid on all money earned from an LLC. This includes all net profits in the case of LLC tax status, or both profits and distributions in the case of S Corp status.
Both federal and state income taxes are assessed. Federal income tax brackets range from 10 percent to 37 percent for 2022, while New York State income tax brackets are from 4 to 10.9 percent for 2021. (New York’s 2022 income taxes weren’t set at the time of writing.)
Sales tax must be collected and remitted on any non-exempt goods sold, and on select services. The state-assessed sales tax rate is 4 percent, but counties and municipalities can add on their own sales tax. The combined rate can reach 8 percent or more in many jurisdictions. There is no federal sales tax.
Sales tax may have to be remitted monthly (Form ST-809 and Form ST-810 series), quarterly (Form ST-100 series) or annually (Form ST-101 series).
If using LLC taxation status, the FICA taxes assessed are actually paid as self-employment tax. The self-employment for 2022 is 15.3 percent in total, which breaks down to 12.4 percent for Social Security and 2.9 percent for Medicare.
The combined 15.3 percent is double the FICA rates that businesses pay. This is because self-employed LLC owners are responsible for both their personal and their business’s FICA taxes. When a business pays the 7.65 percent FICA rate, the employee pays the same rate out of their personal taxes.
Payroll taxes are the 7.65 percent FICA taxes that businesses pay on their employees’ gross wages. These are paid on the reasonable salary if using S Corp tax status. Owners who use the LLC tax status don’t have to worry about these taxes, since they pay the same amount as self-employment tax.
New York State doesn’t assess any other taxes on LLCs, but there is an annual filing fee that must be paid (see Understanding Annual Fees).
Assuming an LLC is profitable, owners normally must submit estimated income tax payments each quarter. These are paid by submitting Estimated Tax Payment Voucher for Individuals (Form IT-2105) along with payment. The vouchers can be mailed to NYS Estimated Income Tax, Processing Center, PO Box 4122, Binghamton, NY 13902, or submitted online.
After your limited liability company is officially filed, there are a few additional items to attend to. These items will ensure that your LLC is set up to operate smoothly and for success.
Business and personal finances should be kept separate, and an essential step in maintaining separation is to have a different bank account for your LLC’s finances.
Maintaining a separate business bank account makes business expenses and revenues clear, which helps in the event of an audit. A separate account also makes calculating profitability easier, ensures business owners receive proper disbursements, provides legitimacy when writing checks, and may assist in maintaining the LLC’s corporate veil.
Opening a business bank account takes only a few minutes, and can be done with a small deposit. Many banks don’t charge a fee for opening an account, and you can usually do so online or in-person. You may want to open a savings account alongside the business checking account.
LLCs in New York must pay an annual filing fee, which ranges from $25 to $4,500 depending on a business’s gross income. The breakdown in fee amounts is as follows:
$25 if earning $100,000 or less, $50 if earning between $100,000 and $250,000, $175 if earning between $250,000 and $500,000, $500 if earning between $500,000 and $1 million, $1,500 if earning between $1 million and $5 million, $3,000 if earning between $5 million and $25 million, $4,500 if earning more than $25 million.
A Partnership, Limited Liability Company, and Limited Liability Partnership Filing Fee Payment Form (Form IT-204-LL) must be submitted along with payment. This form can be mailed to State Processing Center, PO Box 15310, Albany, NY 12212, or LLCs can complete the form and submit payment online.
With a business bank account in place, you’re ready to set up your LLC’s finances. This may include creating a process for making payments, receiving payments, paying employees, paying disbursements, and tracking everything.
You should consult with an accountant, tax advisor and/or attorney, in order to make sure you’re taking advantage of every legal financial benefit that’s available. A qualified professional will be able to help you identify cost savings tactics, and they can tell you what documents must be saved to take advantage of these tactics.
Depending on where your LLC operates and what industry it’s in, you might need to obtain licenses and/or permits. These can include anything from general local licenses that municipalities and counties issue, to specialized permissions such as building permits or a locksmith license.
An attorney and/or your local municipality can help identify any licenses or permits that your LLC might need.
This portion of our website is for informational purposes only. Tailor Brands is not a law firm, and none of the information on this website constitutes or is intended to convey legal advice. All statements, opinions, recommendations, and conclusions are solely the expression of the author and provided on an as-is basis. Accordingly, Tailor Brands is not responsible for the information and/or its accuracy or completeness.