Have you decided that it’s finally time to set up your business in New York ? With its huge populace and energetic culture, the Empire State offers a lot of chances.
New York acknowledges many business forms including the limited liability company (LLC), corporation, sole proprietorship, and other familiar forms. Each has its own advantages and disadvantages. For any particular venture, personal and business conditions will dictate the business form of choice. The New York Department of State cannot offer advice about the choice of business form you choose so it strongly recommends consulting with legal and financial advisors before making the choice.
Forming an LLC should only be done after a detailed analysis. The following data has been developed to answer your questions regarding the formation of an LLC and to assist in the filing of the Articles of Association.
What is a Limited Liability Company?
A limited liability company (LLC for short) is a way to lawfully structure a business. An LLC is a hybrid form of business entity that has specified features of a corporation and a partnership. It has been structured in a way to benefit from the pass-through taxation characteristic of a partnership along with allowing flexibility in operation and management, and yet have limited liability like in the case of a corporation.
In the U.S., the LLCs laws are overseen by individual states but are recognized in all. The laws further differ across countries. Usually, a single individual can start an LLC and there is no upper ceiling on the number of members.
How Do I Form a Limited Liability Company?
To launch your LLC, you must file articles of Association with your state’s corporate filing office, often the Secretary of State. Some states use the term, certificate of formation, instead. Two different states, Massachusetts and Pennsylvania, call the document a certificate of Association.
Special Responsibilities Associated With Forming a Limited Liability Company
The members of an LLC are expected to adopt a written Operating Agreement. The Operating Agreement is the crucial document that establishes the rights, powers, duties, liabilities, and obligations of the members between themselves and with respect to the LLC. The Operating Agreement is an internal document of the LLC and is not catalogued with the Department of State. The law is silent on the fallouts of not adopting an Operating Agreement. Note that the Department of State cannot provide legal advice regarding the preparation of the Operating Agreement.
The Publication Requirements Associated with the Formation of an LLC
Limited liability companies in New York are obliged to publish a Notice of LLC Formation and file the New York Certificate of Publication for Domestic Limited Liability Company with the New York Department of State within 120 days of development.
Steps to finalizing the New York LLC publication requirement include
- Forming a New York LLC yourself or employing a registered agent service,
- Publish a notice in two newspapers in the same county as the principal place of business of the LLC within 120 days of the LLC formation for six consecutive weeks.
- File the affidavit of publication the newspapers will send you with a New York Certificate of Publication for Domestic Limited Liability Company with the Secretary of State.
- The Certificate of Publication, filing fee, and the affidavits of publication of the newspapers must be submitted to the New York Department of State, Division of Corporations, One Commerce Plaza, 99 Washington Avenue, Albany, NY 12231.
Do I Need a Lawyer?
Generally speaking, legal assistance is not necessary when establishing a basic limited liability company. A secretary of state’s office normally provides user-friendly resources to accomplish this task. Nevertheless, complicated formal issues can arise in the operation and management of a limited liability company. Therefore, securing a lawyer is advisable in these situations.
Where Do I Get a Seal?
The Limited Liability Company Law does not refer to a seal of an LLC. However, seals are attainable from commercial sources and legal stationery stores. Keep in mind that the Department of State doesn’t supply seals.
How is a Limited Liability Company Taxed?
The company isn’t taxed directly by IRS as an LLC is not deemed a distinct tax entity. Instead, the tax liability is on the members who pay through their income tax.
Remember that certain LLCs are automatically classified by IRS as a corporation for tax purposes, so be certain to know if your business falls in this category. Those LLCs that are not automatically classified as a corporation can pick the business entity of choice by filing the Form 8832. The same form is employed in case the LLC wants to alter the classification status.
Does an LLC Need Licenses and Permits?
Depending on its type of business and where it is located, your LLC might need to obtain other local and state business licenses. You need to check with the relevant state agencies to guarantee you are properly registered, licensed, and permitted to do business in your state.
Choosing a Name
The name of your LLC must comply with your state’s rules. While these rules differ, most states require that your LLC’s name end with an LLC designator, such as Limited Liability Company, or an abbreviation of one of these phrases, and, that the name is not the same as the name of another LLC or business entity already registered with your state.
Often, for a little fee, you can reserve your LLC name for a brief period of time until you document your articles of Association.
Instructions for Completing the Articles of Association
Filing your articles of Association is important to registering a legally established business entity. The process varies depending on the state, which implies that you should evaluate your legal requirements with business lawyers beforehand. You will also want to guarantee you complete all document requests accurately in order to avoid delays or denials.
Follow these steps to file an article of Associations:
- Select your company name,
- Download a bonafide duplicate of the articles of Association form from your Secretary of State’s website
- Name a registered agent
- Draft and sign an LLC operating agreement
- Lay out if you want to use members or managers
- Sign the articles of Association
- Return the form to your Secretary of State’s Office
- Pay the proper filing fee
- Receive your notary stamped copy of your articles of Association
- Retain a duplicate of the articles of Association for your records .
Many states require LLCs to file a yearly report with a filing fee. The fee for filing the Articles of Association is $200, although, In some states, these fees can be significant, as high as $800 per year.
The fee may be paid by cash, check, money order, MasterCard, or American Express. Checks and money orders should be made payable to the Department of State.
The Department of State issues an authorized filing receipt to the filer of the Articles of Association. The filing receipt indicates the date of filing, the name of the LLC, an extract of information provided in the Articles of Association, and an accounting of the expenses paid. Filers should validate that this information is correct. The filing receipt is your evidence of filing. And note that The Department of State does not issue duplicate filing receipts to replace those lost or destroyed.
To set up your limited liability company in New York, please contact your Damalion expert now.