A limited liability company (LLC) is a business structure that offers several advantages, including pass-through taxation and protection from personal liability. While forming an LLC in New York is an easier process than forming a corporation, still several steps must be followed. As an organizer of this new business, you need to understand the administrative and legal details you will need to take care of to be compliant with state law and have limited liability protection.
What are the Steps in Forming an LLC in New York?
Setting up an LLC is a relatively straightforward process. Since the decisions you make from the outset will have a long-term impact on the success of your business, you need the guidance of an experienced business attorney. These steps must be carried out when forming an LLC in New York:
- Choose a name for your company — You must choose a name that isn’t already in use by another company. The name must include “limited liability company,” “L.L.C.” or “LLC.” You can also hold your company name for sixty (60) days by applying for Reservation of Name if you are not prepared to file your LLC documents yet.
- Decide how your LLC will be managed — You will need to determine whether your LLC will be member-managed or manager-managed.
- Select a registered agent — New York State requires LLCs to appoint the Secretary of State as its agent for service of process. You should also name an additional registered agent but do not have to do so.
- File Articles of Organization — The Articles of Organization is the legal document used to establish an LLC in New York. It must be filed with the state.
- Create an operating agreement — An operating agreement is a document that outlines how an LLC operates and will be managed. Although an operating agreement need not be submitted to the state, the Operating Agreement ensures essential information about the LLC is in writing.
Once you have filed your Articles of Organization, you have one hundred twenty (120) days to follow New York’s publication requirement. This publication requirement is satisfied by publishing notice of the LLC’s formation in two newspapers in the county where the LLC is located. One publication must be a daily newspaper and the other must be a weekly circulation. Failure to complete the publication requirement can lead to your LLC being suspended from conducting and carrying on business in the state.
Steps to Take After Forming an LLC in New York
After you’ve formed your LLC, there are still several steps to take to ensure your business runs smoothly. You may need to obtain business permits or licenses. Whether you need a permit is typically determined by the industry, your business activities, and where your company is located.
You should open a separate bank account for your LLC. A separate bank account is critical to ensure you keep your business and personal finances separate. Not only can maintaining separate accounts give credibility to your company and make accounting easier, but a separate bank account can protect you from incurring personal liability if the LLC is sued.
Be aware that you must comply with the state’s ongoing LLC requirements. In New York, LLC owners must file a biennial report during the anniversary month the LLC was formed and pay a filing fee of $9. In addition, you will also need to remain compliant with the state and federal tax obligations for your LLC.
Contact an Experienced New York Business Attorney
If you are considering forming an LLC in New York, a knowledgeable business attorney can help you navigate the process. Brinen & Associates provides skillful counsel and high-quality legal services to entrepreneurs and business owners for a wide array of business matters, including LLC formation. Call (212) 330-8151 or send us a message to learn how our New York Business attorneys can help.