How to Start an LLC in New York

How to Start an LLC in New York

by Michael H. Cohen, Esq., October 2014

Limited liability companies (LLCs) in New York are affordable and easy to form. And as with other states, the state of New York has some specific requirements.

The specifications required of a New York LLC are:

Registration. File the articles of organization form DOS-1336 with the New York Department of State with all pertinent information such as the LLC name, registered agent address, taxpayer identification number, licenses and permits and member’s signatures. Do not forget to include the filing fee.

Publication. Following Section 206 of the Limited Liability Company Law, businesses are required to publish either a copy of the Articles of Organization they filed with the Department of State, or a notice relating to the formation of an LLC. This must be published in two newspapers assigned by a county clerk for six consecutive weeks. Information in the document to be published must include the name of the LLC, which must match the name filed with the Department of State. Publishers should provide Affidavits of Publication, which must, in turn, be submitted with a Certificate of Publication to the Department of State, accompanied by the necessary filing fees.

Forms and Fees. New LLCs must submit their Articles of Organization form and a Certificate of Publication following the required time period for LLC publication. The fees to be submitted with the forms are about $200 and $50 respectively, but fees may change. To get the most current fees, contact the New York Department of State.

Timeline. Generally, it takes about six to seven weeks to meet the requirements for New York LLC formation, including processing the forms in New York. As for publication timelines, businesses are given up to 120 days from the date they file their Articles of Organization to publish in two newspapers for six consecutive weeks before all LLC transactions are put on hold.

Naming Requirements. LLC naming requirements are very strict in New York. The LLC name must be distinguishable from other LLCs, must be approved by state agencies, and must include certain words in order to qualify and be approved by the Department of State. You may opt to have a preferred name for your LLC checked for availability before you file your formation documents.

Formation Requirements. Formation requirements are simple: every LLC with more than one member is required to have a limited liability operating agreement between members. These are the terms entered into between the members of an LLC that govern the income, taxation, and roles of each member.

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Starting an LLC in New York

Before deciding on forming an LLC in New York, you must understand what an LLC is and if it's a viable business structure for your company. To begin, an LLC is a business structure with flexible organization and limited liability for its members. Members may include individuals, corporations, other LLCs, and foreign entities. One good thing about LLCs is that there is no maximum number of members. It’s also known as a ”hybrid” business structure in the sense that it brings together elements of a corporation and limited liability partnerships.

Here are some tips to help you put together what you need to begin the registration process with the New York Department of State:

1. Decide on a name for your business. Some items to consider as you select a business name:

  • You can choose any name as long as it ends with “Limited Liability Company,” “Ltd. Liability Co.,” or any variant of its abbreviation—LLC or L.L.C.
  • The name cannot use restricted or prohibited words and phrases pursuant to Section 204 of the Limited Liability Company Law;
    Some words may require the consent of various state agencies; and
  • You may opt to submit a Name Availability Inquiry with the Department of State to make it easier to determine whether or not the name for your LLC meets state requirements and is distinguishable from other LLCs.

2. Assign a registered agent, if needed. The state of New York will automatically act as your company’s registered agent unless you choose to designate an additional registered agent. Since the Department of State offers limited services, you can also use another agent for service of process documents. Regardless of who serves as your registered agent, the Department of State or another agent, you must provide a New York residence address where members may be reached should a suit be filed against your company.

3. Make sure the company has all the tax licenses/permits it needs based on the type of business it is. Local permits and licenses can vary between locations, so check with local small business offices, often part of the County Clerk or branch of the city government, to learn more. The Small Business Association (SBA) also offers expertise in finding local forms and permits or you can use an online business license service provider to obtain the proper licenses and permits for you.

4. Get an Employer Identification Number (EIN) from the IRS. If there are two or more members in your LLC, your company will need to obtain an EIN from the IRS, for tax purposes.

5. Make sure that you have a limited liability company operating agreement in place with other members should your LLC have more than one member. Although the operating agreement is not required to be filed with the Department of State, this is necessary when filing your forms as limited liability company operating agreements may be entered into by members prior to filing, at the time of filing, or within 90 days of filing the DOS-1336 Form.

6. Familiarize yourself with the LLC’s continuing legal obligations. Continuing legal obligations may vary with each state. These could be, but are not limited to, state taxes, annual or biennial reports and so on. Make sure that your LLC, should it offer professional services, meets state legal requirements.

Filing an LLC and Fees

Following are the forms and fees that are required when starting an LLC in New York:

1. Forms. First, you need to fill out the DOS-1336 Form or the Articles of Organization Form. Do not forget to include the following information:

  • An address in New York where the members may be reached by the Department of State should a suit be filed against the company;
    Signatures of all the LLC members
  • The LLC name that meets state requirements; and
  • The necessary fees.

2. Fees. Processing fees for the Articles of Organization Form is generally about $200 and submission and filing of the Certificate of Publication requires a $50 fee, although fees can change. Check with the New York Department of State for the latest filing fees. These fees can be paid in cash, check, through money order, or by Visa or MasterCard.

3. Limited Liability Company Operating Agreement. Although this will not be submitted to the Department of State with the Articles of Organization, it is necessary to have this ready within 90 days of filing your Articles of Organization.

4. Certificate of Publication. The Certificate of Publication needs to be submitted and filed with the Department of State within 120 days of filing the DOS-1336 Form.

5. Taxes. LLCs in New York are treated as corporations or limited liability partnerships and are subject to New York Personal Income Tax and Corporate Franchise Tax, which conform to federal income tax classifications. Depending on the type of taxation you opted for your LLC, the tax responsibilities are as follows:

  • An LLC treated as a limited liability partnership. These LLCs are required to file the Form IT-204, or Partnership Return Form with the New York City Department of Finance.
  • An LLC treated as a C corporation for federal tax purposes, or an S corporation. These LLCs are required to file a New York State Corporation Franchise Tax Return.
  • An LLC treated as a sole proprietorship. These LLCs must report all business income and expenses via the sole proprietor’s personal income tax returns.

Also, LLCs may be required to pay a filing fee or an estimated income tax on behalf of certain partners or members.

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