How to Form an LLC in New York
New York's Department of State has its own guide for forming an LLC. Here are the steps it lays out, from the name to the newspaper ads.
New York's Department of State publishes its own guide to forming a limited liability company. This walkthrough follows it. You pick a name. You file Articles of Organization. You adopt a written Operating Agreement. You publish notice in newspapers. Then you handle taxes and licenses.
What an LLC is in New York
New York's guide says an LLC is an unincorporated business organization of one or more persons who have limited liability for the business's obligations. The Limited Liability Company Law sets the rules for forming and running one.
The guide calls the LLC a hybrid form. It gives limited liability like a corporation. It stays flexible like a partnership. That flexible management structure lets owners shape the LLC to meet the needs of the business.
An LLC may organize for any lawful business purpose or purposes. The owners are called members, not shareholders or partners. A member can be a person. It can also be a company, a partnership, another LLC or any other legal entity.
New York also allows other business forms. These include corporations, limited partnerships, sole proprietorships and general partnerships. Each has its own advantages and disadvantages. The state says forming an LLC should only be done after careful analysis. If you are weighing the choice, see LLC, corporation or sole proprietorship.
Choose a name for your New York LLC
The name must include the words "Limited Liability Company" or the abbreviation "LLC" or "L.L.C."
Some words need a yes from another state agency first. Get that before you file the Articles of Organization. Check your name against that rule early.
Not ready to file? You can submit a name availability inquiry. Or you can reserve a name by filing an Application for Reservation of Name.
One caution from the state. Neither one means the Department of State has approved your name. And no expenditure or other commitment should be made in reliance on either one. Do not print business cards off the back of a reservation.
File the Articles of Organization with the New York Department of State
Organizers form an LLC by filing Articles of Organization with the Department of State. Any person or business entity may be an organizer. Organizers may be, but need not be, a member of the LLC formed. You can organize your own company.
The Articles must designate the county within New York State where the LLC's office will be located. Bronx and Queens are each both a borough and a county, so a New York City business may still name a county.
The LLC must designate the Secretary of State as its agent for service of process. Process means the papers that acquire jurisdiction of the LLC in a legal action. The LLC must also provide an address to which the Secretary of State may mail a copy of any process received.
The organizer must sign the Articles and print their name in the space provided opposite the signature.
Two small traps. The name of the LLC must be typed exactly the same in all three places on the form. The Department of State will not accept papers incompatible with its recording technology. Follow the form.
Checks and money orders for the filing fee should be made payable to the Department of State. See the New York LLC filing fee for more on New York's fee. For filing fees in some other states, see the state filing fee for an LLC.
The Department of State will issue an official filing receipt to the filer. Keep it.
Adopt a written Operating Agreement
The members of an LLC are required to adopt a written Operating Agreement. This is not optional in New York.
The Operating Agreement is the main document. It sets out each member's rights, powers, duties and what each owes the others. The state says the Articles have legal effect. It says an Operating Agreement creates rights and duties that the law can enforce.
The Operating Agreement is an internal document of the LLC. It is not filed with the Department of State.
What happens if you skip it? The state says the law is silent on the consequences of not adopting an Operating Agreement. Silent is not the same as safe. Adopt one.
The newspaper publication requirement
New York requires a newspaper publication step. Each newspaper's printer or publisher will give you an affidavit of publication. You must send the Department of State a Certificate of Publication. Attach the affidavits of publication to it.
Get an EIN and handle taxes and licenses
An LLC needs a taxpayer ID number. You get it from the Internal Revenue Service. Federal tax rules let an LLC choose its own income tax treatment. It can be taxed as a corporation or as a partnership. For the number itself, see how to get an EIN number and the IRS EIN rules.
Questions about New York State taxes should be directed to the New York State Department of Taxation and Finance. That office, not the Department of State, answers them.
Some business activities require licenses or permits from state or local governments, or both. Check your own activity. For the general picture, see what a business license covers.
Keep your New York LLC active
New York requires domestic and foreign limited liability companies to file a Biennial Statement with the Department of State. This is true for LLCs formed in New York and those formed elsewhere. See the annual LLC report for how these filings work across states.
New York says most business corporations and limited liability companies may file their Biennial Statement online. The Department of State calls this its e-Statement Filing Service. To use it, you must have the exact name of the entity and its DOS ID number. Find both before you start.
Do you need a lawyer to form an LLC in New York?
The state's answer is plain. Anyone forming an LLC should consider using a lawyer, but there is no requirement to use one.
One more limit on state help. Department of State staff cannot give legal advice. But they can answer questions about filing LLC papers.
A note on licensed professions. A PLLC forms the same way. You file Articles of Organization under Section 1203 of the Limited Liability Company Law. The guide also notes an exemption in Section 23.03 of the Arts and Cultural Affairs Law. If your work needs a professional license, that is the point to ask a lawyer.