How to Open an LLC in NY

How to Open an LLC in NY – Learn the basics of what you need to do to form an LLC in New York.

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LLC Basics

An LLC, or limited liability company, is a business entity that can combine the features of a corporation and a partnership. LLCs are popular because they offer limited liability protection to the owners while still allowing the business to be taxed as a partnership. If you’re thinking about starting an LLC in New York, here’s what you need to know.

Define your business purpose

An LLC is created by filing Articles of Organization with the New York Department of State.3 min read

An LLC is created by filing Articles of Organization with the New York Department of State.3 min read

In order to form an LLC in New York, you must file Articles of Organization with the New York Department of State. The process is relatively simple and can be done online or by mail.

When filing your Articles of Organization, you will need to include:
-The name and address of your LLC
-The names and addresses of your LLC’s members
-The date your LLC will begin operating
-The name and address of your LLC’s registered agent in New York
-The names and addresses of your LLC’s organizers

You will also need to pay a filing fee, which is currently $200. Once your Articles of Organization are filed, your LLC will be officially recognized by the state of New York.

Choose a business name

Your LLC’s name must include the phrase “Limited Liability Company” or the abbreviation “L.L.C.” or “LLC.” It can’t include any reserved words (like Bank, Attorney, University) unless you get written approval from the New York Department of State.

Your LLC name can be the same as your trade name, which is the name your business operates under. For example, if you own a hair salon called “Shear Madness,” your LLC could be called “Shear Madness LLC.”

You can reserve your LLC name for 60 days by filing an Application for Name Reservation with the New York Department of State Division of Corporations. The fee is $20.

Register your LLC with the state

To register your LLC with the state, you’ll need to file Articles of Organization with the NY Department of State. The fee is $200. You can apply online, by mail, or in person.

The Articles of Organization must include:
-the LLC’s name and address
-the LLC’s purpose
-the name and address of the LLC’s registered agent
-the name and address of each member of the LLC
-the date when the LLC will dissolve, if applicable
-the signature of a person authorized to form the LLC

Comply with NY State Regulations

To form an LLC in New York, you must file Articles of Organization with the NY Department of State. The Articles of Organization must include the LLC’s name, address, and the names of the LLC’s members. The LLC must also have an Operating Agreement, which sets forth the rules and regulations for the LLC’s governance.

File an LLC Certificate of Publication

An LLC Certificate of Publication must be filed with the County Clerk in each county where the LLC will do business. The LLC must file the certificate within 120 days of the LLC’s formation. The Certificate of Publication must contain:

-The LLC’s name and address
-The names and addresses of the LLC’s members
-The names and addresses of the LLC’s managers
-The date the LLC was formed
-The date the Certificate of Publication is being filed

The Certificate of Publication must be accompanied by a filing fee.

Appoint a registered agent

Your LLC must have a registered agent in New York. A registered agent is an individual or business that agrees to receive and process legal papers on behalf of your LLC.

The following types of businesses can serve as your LLC’s registered agent in New York:

-A domestic or foreign corporation authorized to do business in New York
-A domestic or foreign limited liability company authorized to do business in New York
-A partnership, limited partnership, or limited liability partnership organized under the laws of any state or country
-A registered limited liability partnership organized under the laws of any state or country
-A registered broker-dealer registered with the Securities and Exchange Commission pursuant to section 15 of the Securities Exchange Act of 1934
-A trustee of an express trust organized pursuant to a written declaration that satisfies the requirements of Article 11 of the Estates, Powers and Trusts Law

Create an LLC operating agreement

An LLC operating agreement is not required in New York, but is highly advisable. LLCs with more than one owner should have an operating agreement to set forth the ownership percentages and voting rights of each member, how the company will be managed, and what will happen if a member leaves the LLC. An LLC operating agreement can help you avoid disagreements and disputes down the road.

Maintain Your LLC

If you own a limited liability company in New York, you must keep it in good standing with the state. That means complying with all the rules and regulations for LLCs. This includes filing annual reports and paying taxes. It’s not difficult to do, but it’s important to keep up with the paperwork to avoid any penalties.

File an annual report

All LLCs organized in New York must file an annual report with the NY Department of State. The report is due on the anniversary of your LLC’s formation date and must be filed online. The filing fee is $9.

You will receive a notice in the mail from the Department of State reminding you to file your annual report, and you can also sign up for email reminders. If you do not receive either of these, you can still file your annual report by logging in to the Department of State’s Business Portal.

The annual report must include:
-The LLC’s name and New York registration number
-The name and address of the LLC’s registered agent in New York
-The name and address of each member of the LLC
-A statement confirming that the LLC is in good standing
-The date that the LLC was formed
-The Signature of an authorized person

Hold annual meetings

It’s important to maintain the formalities of your LLC by holding annual meetings. At these meetings, you’ll need to elect a Board of Directors and Officers, appoint an Agent, and discuss/ approve the LLC’s financials. You should also hold regular (e.g. monthly) Board of Directors and Officers meetings to stay on top of your LLC’s affairs and make decisions as a group.

To make sure you’re staying compliant, you should keep minutes of all annual and Board of Directors/ Officers meetings — even if you don’t take any formal votes. These minutes will serve as a written record of what was discussed at the meeting and can help resolve disagreements later on.

Keep business and personal finances separate

One of the biggest benefits of having an LLC is that it can help you keep your personal and business finances separate. This is important because it can help you avoid liability for your business debts and protect your personal assets in the event that your business is sued.

To maintain this separation, you should open a separate bank account for your LLC and only use it for business expenses. You should also get a business credit card and use it for all business-related purchases. Keeping good records of all your income and expenses can also help you prove that you are maintaining a separate LLC if there ever comes a time when you need to do so.