A Limited Liability Company (“LLC”) is a type of business structure allowed by state statute. There are many different business structures, and you can read more about them here. Despite the many choices, LLCs are a popular structure choice because they provide the same limited liability as a corporation but are simpler and less expensive to set up and run. Businesses can use LLCs to run almost any type of business of any size, from one-owner operations to a business with many co-owners.
How to Start an LLC in the State of New York
Each state has different rules regarding the establishment of an LLC. Therefore, before jumping into your business venture, it is vital to understand the requirements of an LLC in your state. As such, New York has its unique procedures and rules for setting up an LLC. For example, New York is one of just three states that requires a publication requirement. Facts like this can make a substantial difference in your creating an LLC.
There are a few common steps to forming an LLC in New York. The first step is eligibility: to be eligible to create an LLC, you, as the business owner, must be a resident of the state of New York, or your business must be in New York. The New York Department of State also sets specific eligibility requirements for LLCs in the state. There may also be industry and licensing rules to follow specific to your city. Once eligible, LLC creation can include the following steps:
- Choose a name. This name must contain the indicating words “LLC,” “L.L.C.,” or “Limited Liability Company.” The name must also be unique, meaning it is different from other names of LLCs in the state. One must also check to ensure that the name has not yet been taken: while names can be checked on the state’s Corporation and Business Entity Database, the only way to confirm availability is to submit a written request to the Department of State.
- Provide an address for receiving official mail. For example, the registered agent for New York LLCs is the New York Secretary of State. This agent accepts service of process and official correspondence on behalf of your business and sends these documents directly to you. Therefore, you will have to specify where you would like your mail sent.
- File the necessary articles of organization with the state. An LLC’s articles of organization are what establish the LLC as a separate legal entity. In addition, the document will contain information about the LLC and will indicate the type of LLC it is (member-managed or manager-managed).
- Obtain business permits. Depending on your type of business, you may need a special permit to operate the business.
- Publish notice of the LLC’s formation. This publication requirement requires that a copy of the articles of organization or notice of LLC formation be published in two approved newspapers within 120 days of the formation of the LLC.
- Create an operating agreement. This operating agreement must be written and adopted at the time of or within 90 days after filing the articles of the organization.
- Keep the LLC alive. Part of this is done through paying necessary state taxes, hiring employees, obtaining insurance, and so forth.
- Are you transferring a Business to NY? Suppose you currently have a business organized in another state and are moving to New York. In that case, you will have to file a foreign LLC with the New York Department of State or dissolve the foreign entity and re-establish it within New York as a new entity.
Where do I begin?
Creating an LLC is rewarding, but the process can seem overwhelming, especially if this is your first time starting a new business. In addition, there are many requirements from state and federal law, and familiarity with these laws is crucial to the LLC’s proper formation. To simplify the process, you may want to consider speaking with an attorney specializing in business law and has experience assisting clients in creating new businesses. Contact Laizure Metz Legal Services at christopher@laizuremetzlegal.com or phone at (347) 625-7854.