If you’re starting a side hustle or business in the Empire State, registering a New York Limited Liability Company (LLC) can save you money and help accelerate your financial independence goals.
“People hesitate to file a New York LLC because a publication announcement in newspapers is required,” says Sankeetha Selvarajah, a New York-based business attorney and managing attorney of Selvarajah Law PC, a corporate law practice that works with startups and small businesses. “Consider creating a ‘small business team’ of an accountant, attorney, and banker when forming an LLC. Your business team can make sure you meet the legal requirements, and each move you make [with one professional] affects the other two.”
If you’re ready to make your New York-based entrepreneurial efforts official, you can register your LLC yourself, hire a CPA and/or lawyer to help you along the way, or use a guided tool like LegalZoom to make the process easier.
We asked New York-based legal experts and business owners what to keep in mind when registering for an LLC in the Empire State. Here’s how to start an LLC in New York – and what to know about the process as you register.
Step 1: Choose a Name for Your LLC and See If It’s Available
To start the process, you’ll need to consider and choose your LLC name. You can check the naming laws and availability of a name on the New York Department of State’s website.
When registering an LLC name in New York:
- The business name you choose must be distinguishable from other LLCs, corporations, and limited partnerships (LPs) already on file with the New York Department of State.
- The business name must contain one of the following words/abbreviations: Limited Liability Company, L.L.C., or LLC.
- The LLC’s name cannot contain words used to name a government agency such as the State Department, CIA, FBI, Treasury, or any other entity.
- Certain restricted words (bank, lawyer, attorney, credit union, etc.) may require additional documentation and paperwork.
- You can request a name search. The request must be in writing to the Department of State, and the search fee for each name submitted is $5.
- LLCs are required to conduct activities under their true legal name. If an LLC wishes to conduct activities under a name other than its true legal name, a Certificate of Assumed Name must be filed with the Department of State. The filing fee for a Certificate of Assumed Name is $25.
One additional factor to consider in choosing your LLC name is the availability of your business name or a similar name as a domain URL for your website. Think about the goals of your business and the importance of its online presence in your decision.
Step 2: Choose a Registered Agent and Where Legal Documents Will Be Sent
In the state of New York, the “agent for service of process” for every LLC is the New York Department of State. If your LLC is sued, the New York Department of State will accept legal documents and forward them to your LLC. All LLCs in New York must give their name and address to the Department of State.
New York also allows you to appoint a registered agent as an additional agent to receive service of process for your LLC. A registered agent is a person or entity authorized to receive service of process and other legal documents and notices on behalf of the LLC.
A registered agent can be yourself, an employee of your LLC, or an entity that offers a registered agent service. A registered agent service can be a wise low-cost investment if you want to ensure nothing slips through the cracks, or if you plan to be out of state often. The registered agent service must have an address in New York and be available to accept mail during regular business hours.
Step 3: Prepare and File Articles of Organization
The Articles of Organization is a document that officially establishes your New York LLC and provides basic information about it. New York has a form (DOS-1336 Form) that individuals can access to file Articles of Organization.
File the document with the New York State Division of Corporations to properly register your New York LLC. You can fill out the form online or send it by mail.
To prepare your Articles of Organization in New York, you’ll need:
- Your LLC name.
- The New York county where the LLC will be located.
- A New York address where the Secretary of State should mail legal documents to the LLC.
- The signature and address of the LLC’s organizer.
Once you file your Articles, the Secretary of State will review the filing. If the articles are approved, your LLC becomes a legal business entity.
Apply online on the New York State Department of State’s website. You’ll need to either sign in or create an NY.gov account. After you apply, you can log in with your NY.gov account and check your application status.
According to New York Law, an LLC is officially formed when its Articles of Organization are filed with the Department of State or any later time specified in the Articles, not exceeding 60 days from the date they were filed.
Step 4: Publish your Articles of Organization in Two Newspapers
In New York, LLCs must publish a copy of their Articles of Organization or a notice related to the formation of the LLC in two newspapers within 120 days of the Articles of Organization becoming effective.
New York-based LLCs are required to publish in newspapers designated by the County Clerk in which the office of the LLC is located. Once published, the newspaper will provide an affidavit of publication.
“I chose to use a third party service when registering my New York LLC,” says Michael Tasner, owner of a New York-based digital marketing agency. “Because of how complicated the process can be, I decided to hire a one-stop shop.” Tasner says he was concerned about filling out the Articles of Organization himself and screwing something up along the way. He also used a third-party service to classify his LLC as an S corporation for tax purposes.
Your new LLC in New York must publish Articles of Organization in two newspapers, or a notice related to the formation of the LLC, within 120 days of the Articles of Organization becoming effective.
Step 5: Create an Operating Agreement
New York LLC law requires that limited liability companies adopt a written operating agreement, which outlines the way your LLC will conduct business. New York requires that an operating agreement be filed no more than 90 days after filing your Articles of Organization.
Without an operating agreement in place, if you ever end up in court, the state of New York can make determinations about your business based on state law, not what is in the best interest of your LLC. Your operating agreement should include:
- The LLC’s name and official address.
- The name and address of the registered agent.
- The Articles of Organization.
- The purpose of the business.
- Members and their contributions.
- How profits and losses will be divided.
- The process for admitting new members.
- Indemnification and liability clauses.
Step 6: Get an Employer Identification Number (EIN)
With your official certificate from the Department of State saying your New York LLC has been filed and approved, you can register for a nine-digit Employer Identification Number (EIN) with the IRS.
An EIN is like a Social Security number for your business that you’ll use to file taxes for your New York LLC. You need an EIN to open a business bank account, get a business credit card, and manage taxes at the state and federal levels.
Keeping your personal and business expenses separate from day one is strongly recommended to ensure personal asset protection outside your business structure.
How Much Does it Cost to Start an LLC in New York?
You should budget a minimum of $250 to get your New York LLC up and running.
The filing fee to start an LLC in New York is $200. The fee for the Certificate of Publication is $50. A guided service like LegalZoom starts at $79, but may save you time and headaches.
There are other optional fees. If you decide to search for a name before filing, the search fee for each name submitted is $5, and $20 to reserve the name. The division of corporations has a website that will let you research potential business names for free, with the disclaimer that you should pay for a formal search to 100% confirm your name is available.
It will cost between $25 to $150 to expedite the processing time. It is $25 per document for processing within 24 hours, $75.00 per document for processing within the same day, or $150.00 per document for processing within two hours. Expedited handling fees must be paid by a separate check to the New York Department of State.
Additionally, New York-based LLCs are required to file a Biennial Statement every two years with the Department of State. The online filing fee is $9.
Tips for Publishing Articles of Organization in New York Newspapers
New York LLCs are required to publish their Articles of Organization in two newspapers within 120 days of the LLC becoming effective.
Once the New York Department of State provides you with a filing receipt, contact the County Clerk in the same county where your LLC has its official office. You can find their details through a Google search. Then, send the County Clerk a copy of your New York Department of State LLC filing receipt.
Once they’ve received it, they’ll tell you where to publish a notice of the formation of your LLC. The two newspapers they ask you to publish in may vary, so it’s essential to get a formal notification from them before publishing, as you cannot choose the newspapers yourself. Publishing the details of your LLC is a standard practice in New York State, and newspapers have streamlined processes for meeting those requirements.
The notice published by the newspapers should include:
- The name of your LLC.
- The date the LLC was formed.
- The county where your office is located.
- The street address of your LLC.
- A statement that the Secretary of State has been designated as an agent of the LLC upon whom process against it may be served.
- The address where the Secretary of State may forward any process against the LLC.
- The name and address of your Registered Agent.
- A statement that the Registered Agent is to be the agent of the LLC upon whom process against it may be served.
- The purpose of the LLC can be your operating statement.
It’s not enough to publish your LLC in two separate newspapers for one week. New York law requires you to publish the notice for six consecutive weeks. After you’ve met publication requirements, each newspaper will send you an Affidavit of Publication.
File a Certificate of Publication with the Department of State. Attach the affidavit. You will need to pay a $50 fee for the Department of State to process your Certificate of Publication.
“Fortunately, I live in Albany, so I was able to just walk downtown and provide everything,” says Jacques H. Bastien, a New York-based serial entrepreneur. “For me, it was just a lot of moving parts. If I had the money back then, I would have hired a service such as LegalZoom to handle it. It was a lot of stress for me.”
Is it Worth Starting an LLC in New York?
As soon as your side hustle or business makes money, you should consider registering an LLC in New York. According to our experts, it helps protect your assets, lower taxes, and creates flexible ownership.
“The big reason you want to form an LLC in New York is its flexibility and relative ease when it comes to compliance,” says Deryck Jordan, a New York-based business attorney. “With other types of business structures, there are governance and compliance issues that need to be taken into consideration. An LLC is a quick and easy way to start, and it’s incredibly flexible to run.”
If you have a New York-based LLC, you’ll want to stay on top of expenses in debts. The state of New York has a powerful compliance tool known as a Charging Order. A Charging Order is a legal order issued by a court that can direct LLC members to pay all profits or income that would otherwise be distributed to a debtor or creditor.
“New York laws governing a Charging Order allow the court to take a distribution that would be paid out to a member,” says Aleksandr Yarmolinets, a New York-based business attorney. “If a member fails to satisfy a debt to a creditor, a New York court can actually force a sale of the membership interest. In a single member LLC—or an LLC that a family owns—it could be devastating when an outsider comes in and owns a part of the entity directly.”
The Charging Order statutes in New York should be a factor in your decision-making regarding whether or not to register an LLC in New York.
How Long Does it Take to Form an LLC in New York?
If you file online, your New York LLC will be ready in 7 business days (on average). Your LLC may take up to seven weeks to process if you file by mail.
You can opt to expedite your filing online. The State’s Division of Corporations offers expedited processing. It is $25 per document for processing within 24 hours, $75 per document for processing within the same day, or $150 per document for processing within two hours.
Do You Need an EIN to Start an LLC?
You don’t need an EIN to start an LLC in New York, but you’ll want to get one as soon as your LLC is approved so you can get your financial accounts set up. Registering an EIN with the IRS is free.
Starting an LLC in New York may feel intimidating—especially with the required publication notices—but doing so will make your side hustle or business more official. Take the time to get official documentation and you’ll be positioned well to build a business that leads to financial independence.