How to Use this Guide
Before forming a corporation, consider whether a corporation or a limited liability company is the right entity for your business. Usually startups (i.e. separate management that creates long-term value for investors) are formed as C-corporations and small businesses (i.e. owner or manager-managed businesses that distribute regular income to owners) are set up as LLCs or S-corporations.
See REFERENCE to understand the differences between C-Corporations, S-Corporations and LLCs (that can also be treated as S-Corporations).
To secure and register your brand name it must be unique, not too similar to another registered name in New York, and shouldn’t contain any restricted wording.
Once the company is formed, you can consider registering a New York trademark as well. See here: https://www.dos.ny.gov/forms/corporations/0241-f-l-a.pdf
Keep in mind your LLC name should contain the words like ‘Limited Liability Company’ or ‘Limited Company’. Abbreviations for these words like ‘L.C.’ or ‘L.L.C.’ are also acceptable. If needed, you can file an Application for Reservation of Name through mail with the Division of Corps that’s good for 60 days.
To avoid potential delays in relation to name availability, you can also call the corporation bureau at +1(518) 473 2492 to search up to 5 names without charge or mail a request to New York Department of State, Division of Corporations, One Commerce Plaza, 99 Washington Avenue, Albany, New York 12231 or fax a request to +1(518) 473 1654 or email using the contact form available here: https://www.dos.ny.gov/about/contact.asp?DCODE=CORPS#emailcontact
The written request for each name search costs $5.
Name Reservation Filing Fee: $20
Your NY Registered Agent is a sort of legal representative of your brand, but not in a lawyer or attorney-sense. It’s their job to officially receive/process important business documents like state filings, legal notices, tax forms, and so forth.
This is why they have to be either a NY resident individual or a registered business entity and be reliable during all regular business hours M-F (9a.m. to 5p.m.).
That said, you can hire 3rd party professional and expect to pay up to $160/year, or get a registered agent free for the first year when you start an LLC through IncFile. They handle this along with much more depending on your startup package.
Download and print out the Articles of Organization which will need to be filed with the Division of Corporations of the New York Department of State when you’re ready to set up shop and go into business.
The official form only addresses the basic requirements and may not include some of the optional provisions such as business purpose, limitations on the powers of the manager or members and any other provision in the operating agreement that the members would prefer to include the Articles of Organization as well to give notice to third parties regarding such matters.
It’s an important declarative document about the basics of your brand for the public record – county where the LLC will be located, name and address of brand, registered agent info, hours of operation, etc. You can file through mail or by using the state’s Online Filing System.
When using mail, send mailings to New York Department of State, Division of Corporations, One Commerce Plaza, 99 Washington Avenue, Albany, NY 12231. You can mark “expedited processing” on the mailing envelope and pay the applicable expedited processing fee if you need a rush filing.
You can also fax the Articles of Organization (along with a Credit/Debit Card Authorization Form for payment of filing fees) to +1(518) 474 1418. Credit/Debit Card Authorization is available here: https://www.dos.ny.gov/forms/corporations/1515-f.pdf.
Important: Make sure to always include the back page for the form Certificate of Incorporation that has the document title and the filer’s name and address.
For certain LLCs that will provide professional services such as medicine, law and other services that require professional licensing in New York, you will need to subject additional certifications from your licensing body to properly set up a professional LLC.
LLCs can have one-member of multiple-members. It can be managed by members or managers.
LLC Filing Fee: $200
What’s an EIN, or Employer Identification Number? It’s almost exactly like a social security number but for businesses instead of flesh and blood individuals. You’ll need it to process taxes, set up business bank accounts, to legally hire employees and more. But don’t worry, it’s easy to get one these days.
First and foremost, make sure that your LLC’s bank accounts aren’t mingled with any others of any kind. It’s a huge mistake you can avoid with ease, okay?
Secondly, don’t just assume where you bank personally is the best choice. Is it convenient? Sure, but there are tons of places to build your brand’s financial foundation and many of them are likely offering much better deals and incentives: local, state, and national banks.
An LLC Operating Agreement sets forth the ownership structures, classes of membership interests or unit along with the financial and managerial relationships between owners.
An Operating Agreement protects your limited liability status and overrides state-default rules, which may not be applicable to your platform at all. The Operating Agreement may contain number of rights and obligations of the members including, for example, a right of first refusal, obligations for additional capital contributions, pre-emptive rights and certain buy-sell provisions that make require certain members to sell on certain trigger events or allow other members sell in such cases.
In other words, if you don’t take the time to write down the ‘rules’ of your LLC, then the state’s default rules take over. If there’s a dispute these may or may not help your LLC survive. Free of charge, you can draft one yourself using one of these Operating Agreement templates which are fully customizable.
You can decide to issue certificates for membership interests or units or keep the interests uncertificated. Sometime the LLC may issue certain “profit interests” or “incentive units” to incentive service providers. Such “profit interests” are authorized in the Operating Agreement and are different from “capital interests” under IRS rules.
If you don’t authorize such interests on initial formation, you can always amend the Operating Agreement to authorize such interests.
Real talk: this is where a professional really comes in handy, especially if the nature of your business means a bit more in the red tape department. There may be a nice stack of paperwork, or just be a couple with corresponding fees. You get the idea. Just be diligent and get these obligations taken care of.
If you need help, consider professional Business License Research packages that can quickly source all needed documents for you.
New LLCS must publish a copy of the Articles of Organization in two county newspapers (one daily and one weekly newspaper where the business is located) for six weeks within 6 months of the date when the LLC is officially formed.
Check with your local county for the list of county newspapers that have been approved for publication and shop around for the lowest prices before deciding on the newspapers.
Call or email the advertising department of the newspapers to schedule the publication and after the publication is done, you must file a Certificate of Publication along with an Affidavit of Publication provided by the newspaper with the New York State Department of State.
Filing Fee: $50
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Note that this guide for forming a New York LLC isn’t a legal document or legal advice. It’s for informational purposes and the information above is subject to change. For specific legal questions regarding how to form an LLC in New York, please consult with a business attorney. We recommend Umar Farooq.