Forming a Limited Liability Company (LLC) offers entrepreneurs several benefits, with two benefits often making the decision easy to form an LLC. First, members that form an LLC are not legally liable for any of the debts incurred by a business. Second, an LLC benefits from pass-through taxation, which means any income generated by an LLC passes through the business on to the members of the LLC. The business does not pay an income tax, but each member must file an individual tax return with the IRS that includes the income generated by the LLC.
Now that we know about two significant benefits of forming an LLC, let’s learn about the registration process for an LLC in New York.
Step #1: Select a Name
New York law requires a business to use the words “Limited Liability Company” or the abbreviation “LLC” or “L.L.C.” as part of the business name. The name that you choose for your LLC in New York must be easy to distinguish from the names of other businesses the State of New York has on file. You can check to see if your business name is easy to distinguish from other New York businesses by accessing the business name database operated by the New York Department of State Division of Corporations. Reserve a name for your LLC for 60 days by filing an application with the state.
You do not have to use the name that is listed in the Articles of Organization for your LLC.
Step #2: Submit a Forwarding Address for Legal Documents
The New York Department of State automatically acts as every LLC’s agent for service of process. After receiving legal documents for an LLC, the department forwards the legal documents to the LLC. This means you must submit a forwarding address to the New York Department of State. Filing an incorrect address can prevent you from learning about any legal actions taken against the LLC.
Submit the Articles of Organization
New York officially recognizes an LLC on the day the state receives an LLC’s Articles of Organization. The Articles of Organization must include the following information.
- LLC name
- County where the LLC operates
- Forwarding address for all legal documents
- Name and address of the member who files the Articles of Organization
- The signature of the filer
You can submit the Articles of Organization by mail or online. As of May 2021. New York charged a filing fee of $200 for the Articles of Organization.
Create an Operating Agreement
Although most states do not require the adoption of a written operating agreement, New York law makes it mandatory for all entrepreneurs to adopt a formal written operating agreement to start an LLC. You must submit your LLC’s operating agreement within 90 days after you file the Articles of Organization. The operating agreement represents the document that lists the rights, powers, duties and legal liabilities of each member.
Requirements for Media Publication
Within 120 days after your LLC activates its Articles of Organization, you must publish a copy of the articles or a notice that describes the formation of your LLC in at least two newspapers. The county clerk provides you with a list of newspapers that are eligible to publish public notices concerning the formation of LLCs. After publishing a copy or a notice concerning the formation of your LLC, the newspaper where the information appears must provide you with an affidavit of publication.
Comply with New York Regulations
If your LLC has more than one member, then you have to acquire an Employer Identification Number that is issued by the IRS. You are also responsible for the filing of the annual state fee and the acquisition of business licenses that are required for your type of business to operate in New York. The New York Business Express website can help you determine the permits and licenses that your LLC needs to conduct business in the state.
To learn more about registration of your LLC in New York, schedule a free consultation with a lawyer from the Cloud Peak Law Group.