How to select a name for a New York LLC? Every new business needs to come up with a name. While marketing concerns are valid, you’ll also need to follow New York law.
New York’s LLC Law section 204 specifies the LLC naming requirements. Each LLC must include one of the following:
The name of your LLC must be distinguishable from existing businesses. Use New York’s Business Entity Database to check for what is already used. Coming up with a unique name is wise and required.
There are many terms you must avoid using. You can’t hold yourself out as something you aren’t, such as a governmental organization. Also only use terms related to highly-regulated industries if authorized to do so. These include things like medical, financial, or legal services.
It can help to know that many LLCs operate under a name different from the legal entity name. These are doing-business-as (DBA) names. For example, “New York Delivery LLC” can use “NYC’s Fastest Courier.”
Another element to think about is the domain name (URL). Even if you don’t want to launch a website immediately, it’s worth securing the matching domain name right away.
What is a registered agent? Every business must provide a point of contact responsible for receiving important documents. The registered agent performs this duty.
A primary function of the registered agent is for legal service of process. This means that if someone sues the LLC, the paperwork goes to the registered agent.
Some business owners appoint themselves as registered agents. But seasoned owners understand the value of hiring a registered agent service.
Electing to use yourself as the registered agent has the following advantages:
There are also some disadvantages to appointing yourself as the registered agent. These include:
We recommend hiring a registered agent service to avoid these downsides. They’ll sort your mail and keep your address confidential. Registered agent services cost around $100-$150 per year. Attorneys can charge up to $500 per year for this service.
If you choose to start your LLC by using a business formation company, they often include a registered agent service in their packages. Feel free to take a look at our registered agent recommendations article for more information.
How do you file the Articles of Organization for a New York LLC? Hold on to your hat because this is the most powerful step in the process. Filing your Articles of Organization transforms your idea into a legal enterprise. The LLC doesn’t exist without it.
This task can seem complicated. In reality, it’s something most can handle on their own and only takes basic information to complete.
Section 203 of the Limited Liability Company Law provides the details. The LLC’s name, purpose, and contact information are some of the necessary components. You can use this fillable form provided by the state to make things even easier.
A $200 fee applies to filing the Articles of Organization. You’ll also need to pay a $50 fee for a certificate showing you’ve published newspaper notices.
The Division of Corporations must process your application for it to take effect. The average delay is seven business days, but you can pay for expedited service if needed. Here are the times and fees that apply to quicker processing:
To save time and avoid the hassle of LLC filings, all seasoned entrepreneurs use LLC formation services. For recommendations, check out our article on the best LLC services.
Does my New York LLC need an operating agreement? This is optional in some states. But New York law requires all LLCs have an operating agreement. This private contract between the LLC members sets out the rules under which it operates.
This mandatory agreement helps avoid problems down the road. It specifies the rights and responsibilities of the members and managers. Operating agreements also lay out the methods for adding or removing members.
The best operating agreements cover any situation the LLC may find itself in. Owners can customize them according to their desires and expectations, including:
Even though New York requires every LLC to have an operating agreement, you don’t have to file it with the state. It is a private contract between the members.
LLC formation services provide operating agreement templates for as little as $50. This cost is worthwhile to ensure your LLC operates as you want it to.
What is New York’s publication requirement? Newspaper notices are a traditional way to keep the public informed. Most states have removed this somewhat archaic need thanks to the internet. But New York still requires it.
New LLCs must publish notices of their formation with two local newspapers. You have 120 days to complete this step. There are three ways to tackle it:
The total cost also depends on the specific newspaper costs. Some outlets charge more than others and the differences can be dramatic.
Once published, file for a certificate with the Secretary of State. You can find a form statement in the text of Section 102 of the Limited Liability Company Law. A $50 fee applies.
Do I need to get an EIN? The Internal Revenue Service uses Employer Identification Numbers (EINs) to track the tax information of businesses for federal tax purposes. They are essentially like Social Security Numbers for businesses.
The IRS requires certain businesses to get an EIN. These include any of the following:
Even if you don’t fall under one of these qualifications, getting an EIN is beneficial for your business. For example, some states require having one for state tax purposes, and banks often require them to open a business bank account for your LLC.
The IRS has made the process easy through its online EIN application. It only takes about five minutes to complete and is entirely free of charge. It’s not worth hiring someone to do this unless it’s part of a wider LLC formation package.
Read More: How to get an Employer Identification Number in New York
A critical component of starting a business is getting the necessary approval. The state, county, and city-level authorities offer licenses and permits. Failing to get what you need before operating can result in serious consequences.
While not always necessary, New York offers many professional licenses for certain operations. These cover occupations like real estate brokers and security guards.
Review the New York business checklist to see what applies to your entity.
After meeting the State’s needs, it’s time to turn to the local authorities. New York City and each of the five County offices might require specific approval.
While not all businesses need one, many entities need licenses or permits from New York City. These apply to certain activities, such as:
NYC offers an automated guide to help you navigate the process.
Each of the five boroughs and their respective counties also offer business licenses and permits. For example, Manhattan businesses might need a business certificate from New York County. Those in Brooklyn should review the Kings County licenses.
Bronx County, Richmond County, and Queens County all have specific requirements too.
Before starting up, ensure you have what your business needs to operate. For extra help, reach out to the local City and County offices. They can help guide you through the process.
Leveraging the knowledge of local leaders can help uncover the path to success. Seasoned entrepreneurs are eager to connect and share valuable insights.
Here is a list of local organizations dedicated to helping businesses thrive:
When you get to this point, take a moment to celebrate. You have created a New York LLC and are on your way to becoming a successful business owner. But there are some tasks worth completing right away.
The internet is a central tool for many modern businesses and customers. Even if you don’t want to launch a website right away, it’s worth getting a domain name (URL) for your business.
If you don’t, other people can snatch the domain name that matches your LLC name. These can be competitors looking to stifle competition. Or domain squatters, who buy the domain names so they can resell them at a markup down the road.
Registering domain names is a quick, affordable and straightforward process. Most domain names cost around $20-$50 per year. Secure the rights to your domain name before someone else does.
Another tool for your LLC is a doing-business-as (DBA) name. This allows companies to operate under a name different from the business’s legal name. Some call these assumed names.
Using a DBA name is a common practice. It helps merge any gap between the LLC name and what you want to show on your building or signs. For example, “New York Pest Control LLC” can operate under “New York Bed Bug Specialists.”
Section 130 of the General Business Law provides the legal guidelines for using a DBA name. If you decide to use one, you’ll need to file the DBA with the New York Secretary of State. The form only requires basic information, and a $25 fee applies.
For New York LLCs, you’ll also need to follow the New York City requirements. These are specific to each of the five counties.
Forming your business entity is the foundation to operate. But there are some ongoing compliance concerns that you’ll also have to deal with.
New York law requires LLCs to file a statement with the Secretary of State every two years. It is a quick update of the basic information and contacts. You can bypass this step by listing this information in certain tax reports.
If you hire any employees, you’ll have to register with the state and pay employment taxes. Some businesses have more state tax considerations. These include corporate franchise tax or estimated tax payments.
Now is also an excellent time to open a business bank account to keep the business finances separate. You should also consider purchasing insurance coverage. Policies for general liability, workers’ comp, and commercial property coverage might be worthwhile.
Most importantly, having an LLC will ensure your personal assets are protected if your business cannot pay its debts. Running your business through an LLC can also provide you with better tax treatment. In addition, LLCs have fewer and less complicated reporting requirements compared to other types of businesses, making them particularly suitable for smaller businesses.
It is not strictly necessary to form an LLC in order to start a business. You can engage in business as a sole proprietorship instead. However, in that case, your personal assets may be at risk if your business takes on too much debt or loses a lawsuit in court.
It doesn’t cost much to set up an LLC for your business. In most states, you will need to pay less than $150 to register your new LLC with the local state authorities. In some states, you may need to pay some additional costs later on, for example, when filing an annual report or filing for a DBA.
The time it takes to have your LLC approved can vary wildly depending on the state, the filing method you used and if you opted for expedited filing. In some states, you can have your LLC approved in as little as one day, while in others, it may take weeks or even months.
If you want the fastest possible turnaround time, you should consider using online filing and pay for expedited service, if available.
The IRS and most state tax authorities treat LLCs as “pass-through” entities. This means that your LLC does not pay taxes directly (as corporations do). Instead, the tax burden is passed through to the members of your LLC. The members will then include profits and losses from the LLC’s business on their personal income tax returns.
It is generally best to form your LLC in your home state, where you will actually carry out your business. Some people believe that it is advantageous to form your LLC in Delaware or Nevada. In reality, you would then have to register with the authorities in your home state as a foreign LLC and pay additional fees – without much benefit in return.
You are not generally required to file for a DBA (“Doing-Business-As”). However, most business owners choose to do so anyway. Getting a DBA will allow you to omit the letters LLC from your customer-facing business name. You can also have multiple names for your LLC if you want to run more than one business through your LLC.
Yes, you can form an LLC for your business in any US state. There is no requirement for you to be a US citizen in order to form an LLC, nor do you need the right to reside in the US. If your business is going to own physical property in a given state, you may want to form your LLC in that state.
No, you don’t need to hire an attorney to form an LLC for you. It is generally much cheaper and straightforward to file the necessary paperwork yourself or to hire an affordable LLC formation service to handle the work on your behalf. However, you may want to consider hiring an attorney if your business is very complex.