How to Start an LLC in New York (May 2024 Update)

A limited liability company (LLC) combines the tax benefits of a partnership with the liability protections of a corporation. Forming an LLC shields your personal assets from business debts and claims in the event your business is sued. At the same time, starting and running an LLC offers flexibility and tax efficiency.

New York has over 900,000 active LLCs registered in the state. Whether you’re a New York resident or planning to expand your business here, forming a New York LLC offers many advantages. This comprehensive guide will walk you through every step of starting an LLC in New York.

Benefits of a New York LLC

Here are some of the top reasons to form an LLC in New York:

• Limited personal liability - As the name implies, an LLC limits your personal liability if your business has trouble paying debts or gets sued. Creditors can seize LLC assets but not your personal bank accounts, house, car, etc.
• Tax flexibility - LLCs can choose to be taxed as a sole proprietorship, partnership, S corporation or C corporation. You can select the most advantageous tax status.
• Credibility and professionalism - Registering an official business entity establishes legitimacy in the eyes of customers, partners, and lenders.
• No limit on ownership - Single owners, married couples, partnerships, corporations, private equity firms and non-US citizens can all be co-owners of a New York LLC.
• Low compliance burden - Unlike corporations, LLCs don’t require extensive record-keeping, board meetings, voting, etc.

Steps to Forming a New York LLC

Follow these key steps to set up your New York LLC.

Step 1: Choose a Business Name

Your LLC name establishes your brand, so pick something memorable that aligns with your products or services. It must contain “LLC,” “L.L.C.” or “Limited Liability Company” and be distinguishable from other business names filed in New York.

Check name availability using New York’s Corporation and Business Entity Database. You can also submit a written request ($5 fee per name) to the Division of Corporations. If the name you want is available, reserve it for 60 days ($20 fee).

Step 2: Appoint a Registered Agent

All New York LLCs must designate the Secretary of State as their statutory agent to receive legal notices. You can also appoint a secondary registered agent if preferred, such as yourself, a family member over 18 or a registered agent service. Using an agent service keeps your address private.

Step 3: File Articles of Organization

Draft and file formal Articles of Organization ($200 fee) with the Department of State to legally form your LLC. This simple document states basic details like your LLC’s name, county location and registered agent. File online for instant processing or by mail.

Step 4: Fulfill Publication Requirement

Within 120 days after filing your articles of organization, publish a formation notice in two approved New York newspapers -– one daily and one weekly – in the county where your LLC is located. This must run for six consecutive weeks. Newspapers charge a fee for this.

After publishing, file a Certificate of Publication ($50 fee) with the Division of Corporations to confirm you completed this requirement. Failure to do so can result in suspension of your LLC.

Step 5: Create an Operating Agreement

New York law mandates LLC members adopt a written operating agreement within 90 days of filing articles of organization. This internal document outlines member responsibilities, distribution of profits, adding/removing members and other terms.

Customize an operating agreement template or work with an attorney. Even single-member LLCs benefit from having an agreement for liability protection.

Step 6: Obtain an Employer Identification Number (EIN)

Apply online in minutes on the IRS website to get this unique 9-digit tax ID number (sole proprietors can use SSN). You’ll need an EIN to open an LLC business bank account, hire employees and file taxes.

Additional Steps to Maintain Your New York LLC

Comply with requirements to keep your LLC in good standing:

• Open a dedicated business bank account to get liability protection. For more information, take a look at our article on the key benefits of business checking accounts
• Understand your tax obligations – LLC income passes through to members’ returns
• File a biennial statement every two years ($9 fee)
• Obtain any necessary licenses, permits, registrations etc.
• Report new hires and pay payroll taxes if you have employees

Choosing a Registered Agent Service in New York

Using a registered agent service offers two big benefits:

• Keep your personal address private: Rather than listing your home or office address in the public corporate records, you can use your registered agent’s New York address. They’ll forward any important documents received.
• Reduce publication costs: LLC publication ads can cost thousands of dollars in places like Manhattan or Brooklyn. However, registering your agent’s business address in a less expensive county allows you to publish locally there and save hundreds.

Creating a top-notch operating agreement

Don’t overlook the importance of crafting an excellent operating agreement customized for your New York LLC. Here are some key sections to include:

• Member capital contributions and ownership percentages
• How new members are admitted/old members leave
• Member voting rights and management structure
• Distribution of profits and dividends
• Rules for dissolving the LLC

Set clear rules and financial terms upfront to avoid messy conflicts later. Consider working with an attorney if you have lots of members or complex operating requirements.

What Does It Cost to Form an LLC in New York?

The direct costs to form a New York LLC include:

• Articles of Organization filing fee: $200
• Biennial statement every two years: $9
• Newspaper publication ads: $100-$1,000+ depending on county
• Certificate of Publication filing fee: $50

So you’re looking at roughly $375-$1,500+ in New York LLC formation costs. The newspaper ads cause the wide price range.

You may also spend on a registered agent service, operating agreement creation, EIN application, business licenses, bank fees, legal fees and tax registration costs. Consider these additional expenses in your startup budget.

How to Publish LLC Formation Notices in New York

Complying with New York’s publication rules within 120 days after filing your articles of organization ensures your LLC remains authorized to legally operate. Here are step-by-step instructions:

• Contact the county clerk where your LLC is located for a list of approved newspapers. You need one daily and one weekly paper.
• Draft a notice with your LLC’s formation details and call to arrange publication. Use six consecutive weeks for frequency.
• Newspapers will mail you an affidavit of publication and snippet showing your notice after it has run. Expect fees between $100-$2,000+.
• Gather both affidavits and file a Certificate of Publication with the Division of Corporations to confirm compliance. Include $50 fee.

Check county clerk websites for their approved newspaper lists. Call papers ahead for accurate pricing, as publishing costs vary widely across New York.

How to Change a New York LLC Address

If you used a registered agent’s address to minimize publishing fees but want your true business address reflected in the state records, file a Certificate of Change form after completing the newspaper publication process. This costs $30 through the Division of Corporations.

You can also file a Certificate of Change anytime your LLC’s address, registered agent or other key details need updating. Just check the boxes on the simple form for what information you want amended.

Other common reasons to change your LLC record details with New York include:

• You move company headquarters to a new county
• Your registered agent cannot receive mail at their listed address
• LLC ownership transfers take place
• You expand/narrow your type of business activities

Ensure you file the Certificate within 30 days after any material changes to your LLC's original submission documents.

Conclusion

By following the steps outlined in this guide, you can confidently register your New York LLC even as a layperson. While legal and tax considerations do exist for business formation, using resources like templates and clear instructions allow you to handle the process DIY without high lawyer fees.

Stay organized and set reminders for important deadlines like completing newspaper publication rules within 120 days and filing your biennial statement every two years. This will keep your New York LLC compliant and legally authorized to continue operating. Leverage third-party services like registered agents and accountants as needed for hassle-free maintenance.

With the freedom and protections of an LLC, New York presents open doors for entrepreneurs across all industries to turn their passions into thriving enterprises. We wish you tremendous success!