How to start a New York LLC

An LLC is a type of business that helps protect its owners (called members). This means that if the business owes money or gets sued, the members’ personal assets, like their house or car, are usually safe. 

In the state of New York, an LLC is defined as “an unincorporated organization of one or more persons having limited liability for the contractual obligations and other liabilities of the business” (34 § 102(m)). That means the owners of LLCs, also known as members, may have their personal assets safeguarded against the company’s debts or legal disputes, except in cases where owners may be personally liable under other laws.

If that sounds like a lot of legal jargon – that’s because it is! What you need to know is that LLCs are popular with business owners because they are simple and flexible to run. They have fewer rules compared to comportations and the owners can choose if they want to manage the business themselves or appoint managers to do it. 

Another benefit is how taxes work: LLC owners can pay taxes through their own personal tax returns, or they can choose to have the business pay taxes separately, like a corporation. This gives owners more choices in how they handle taxes as their business grows.

Why should I register for an LLC in New York?

You may want to register for an LLC in New York when:

• You own or want to start a business in New York, or want to expand an existing business into New York, and want to stay legally compliant. 
• You own or want to start a business, and want more flexibility on how you will manage the business or pay taxes than a corporation would provide.
• You want to protect your personal assets from potential liability resulting from business you conduct in the state of New York. 
• You own or want to start a business, and want to register in New York to open accounts, lease or buy property, secure funding, or hire employees.

Do I need to file my LLC in New York if I live in another state?

Any LLC that does business in New York must register with the State of New York. New York does not outline any specific actions that constitute transacting business, however, these actions, among others, are not considered to be doing business in New York:

• Maintaining or defending any action or proceeding, whether judicial, administrative, arbitrative or otherwise or effecting settlement thereof or the settlement of claims or disputes.
• Holding meetings of its members or managers.
• Maintaining bank accounts.
• Maintaining offices or agencies only for the transfer, exchange and registration of its membership interests or appointing and maintaining depositaries with relation to its membership interests.

LLCs based in New York are called "domestic LLCs," and out-of-state LLCs are called "foreign LLCs." Foreign LLCs and domestic LLCs may have different filing and compliance requirements -- Rocket Lawyer can help you navigate foreign LLC registration, regardless of where you live.

How to start an LLC in New York

1. Find a unique name for your New York LLC

The state of New York requires that the names of all LLCs in the state:

• Must include the words "Limited Liability Company" or the abbreviation "LLC" or "L.L.C."
• Must not include any prohibited words or phrases.
• Are not too similar to existing LLCs in the state. You can search the state of New York's database of business entities in the state to ensure your business' name is unique.

Rocket Lawyer can help you determine whether your business' name is eligible for registration in New York and may be able to help you reserve the name before you file your LLC.

2. Include your other LLC members (if any)

In New York, you can in fact form as a one-person LLC. In this case, the LLC would be referred to as a single-member LLC (SMLLC), whereas if there is more than one owner, the LLC may be called a multi-member LLC. 

The main difference between single-member and multi-member LLCs lies in ownership structure and management. With a single-member LLC, you have full control over the business. In contrast, a multi-member LLC has multiple owners, each with a specific percentage of ownership as defined in the operating agreement. This means that in a multi-member LLC, owners share profits, losses, and tax responsibilities based on their ownership percentage.

3. Provide a New York address

This will be used as your official LLC address. The address that you list may either be your home, an office, or another physical location, but it cannot be a PO box.

4. Choose a Registered Agent

A Registered Agent is the person or business responsible for receiving tax, legal, and government documents during regular business hours. It's important that every business has one. You can either serve as your own registered agent (if you have a New York address) or choose one to do that service for you (if you are not located in New York or would like an extra layer of privacy).

5. Register your LLC with the state of New York

Once you have a business name and registered agent, you can register your business as a New York LLC with the state of New York by filing your Articles of Organization. This document may be referred to informally as an LLC's "Articles," or in other states, it may be called a "Certificate of Organization," "Certificate of Filing," or "Certificate of Formation."

6. Get an Employer Identification Number (EIN)

New York LLCs are required to have a Federal EIN tax number. Think of your tax ID as the social security number for your company. It will be important for business contracts, tax filings, and all manner of documents down the line. Every company should have one to remain in good standing.

7. Pay the state filing fee

Every state has different fees for forming an LLC, which can also vary from one year to another.

Congratulations! After you have completed all these steps, you have formed your New York LLC.

What to do after forming a New York LLC

There are a few steps you need to take to maintain your New York LLC:

1. Create an Operating Agreement: New York requires companies to create an Operating Agreement. We can help you create your New York LLC Operating Agreement online.
2. Hold a meeting: a first meeting with members of an LLC is not required by law, but it is highly suggested in order to get organized. Also, unlike corporations, LLCs are also not required to maintain Meeting Minutes, but these documents are also recommended as they provide records for important decisions made.
3. Publish a Notice of Organization: publication is required once a week for six consecutive weeks in 2 newspapers in the county where the LLC's office is located. One of these newspapers must be printed weekly and the other must be printed daily.
4. Pay taxes according to how you chose to be taxed: traditionally, LLCs are "pass-through entities." This means that you pay your business taxes on your personal tax form. That said, you can elect to be taxed like a corporation, if you choose to do so.
5. Receive a Certificate of Publication: this will need to be filed after you've met the above publication requirement.
6. File a Biennial Statement: this is due on the anniversary month of formation every two years.
7. Hold an annual meeting: unless specified otherwise in the Operating Agreement, you'll need to hold an annual meeting of members.

What is needed to keep records for my New York LLC

The State of New York requires the following records to be kept at its registered office or principal place of business:

• If the limited liability company is managed by a manager or managers, a current list of the full name set forth in alphabetical order and last known mailing address of each such manager.
• A current list of the full name set forth in alphabetical order and last known mailing address of each member together with the contribution and the share of profits and losses of each member or information from which such share can be readily derived.
• A copy of the articles of organization and all amendments thereto or restatements thereof, together with executed copies of any powers of attorney pursuant to which any certificate or amendment has been executed.
• A copy of the Operating Agreement, any amendments thereto and any amended and restated Operating Agreement.
• A copy of the limited liability company's federal, state and local income tax or information returns and reports, if any, for the three most recent fiscal years.

Still have questions? Rocket Lawyer can help you with the process of forming a New York LLC. Get started today!

 

Key takeaways Registering an LLC in New York can give you a lot more flexibility than a corporation, as well as protection for your personal assets from potential liabilities. Even if you live in another state, you must register your LLC in New York if you do regular business there, like selling things or having employees. After starting your LLC, you will need to create an Operating Agreement and hold a first meeting, as well as publish a Notice of Organization.  Keep records of your New York LLC, like the names of all members, tax documents, and your business rules. These help you stay organized and follow the law.

Additional resources

Learning how to enforce a contract is just one step. Explore these additional topics to learn more and take the next steps.

• What is an LLC
• How are LLCs taxed
• How to start an LLC
• Do I Need a Registered Agent?
• How and when to file an Annual Report