There are a number of possible forms a business can take in the state of New York. One of the most popular is a Limited Liability Company (LLC). It provides business owners with a number of advantages. All LLC business owners will have the limited liability protection experienced by a corporation. An LLC does not have to maintain formal minutes, have meetings and more like a corporation. The profits and losses go through the LLC to its individual members. Corporate taxes don’t have to be paid. It’s an excellent way to avoid double taxation. New York Department of State (NYDS) is not permitted to provide advice when it comes to choosing a business form. They will advise an individual to speak with legal professionals before making this decision.
Determining A Name
Any name for an LLC must have the words “Limited Liability Company” included in it. It must also be different from any other LLC name on file with the NYDS. There are laws covering naming an LLC in New York that cover the different phrases and words not permitted or restricted. There are also specific phrases and words that must have consent or approval before an LLC’s Articles of Organization are filed. It’s possible for people to submit a name availability inquiry with the NYDS. A name can also be reserved when an Application for Reservation of a Name is submitted.
Articles of Organization
The Articles of Organization include a statement of the LLC’s purpose, information on how it will be managed, its duration, name and address of its registered agent and more.
NYDS will create a reproducible official record of the Articles of Organization when it is properly completed and accepted. The NYDS does not take Articles of Organization that is not compatible with its recording technology. Any signature or entry should be typewritten and able to be reproduced on white paper with black ink. Condensed fonts, colored inks and more should be avoided. The articles can be filed with the NYDS online or by postal mail.
All LLCs in New York are required to appoint the NYDS as its registered agent for service of process. Should an LLC be made part of a lawsuit, the Department will receive and forward all legal paperwork to the LLC. It’s also possible to appoint an additional registered agent for service such as an attorney, company, New York resident and others.
The NYDS requires all LLCs to have a written operating agreement. This agreement can be entered into prior to the time the Articles of Organization being filed. It must be done within 90 days of the filing. This document determines the powers, rights, obligations as well as duties of LLC members. It is designed to only be an internal document. It does not have to be filed with the NYDS.
Section 206 of the LLC laws in New York require every LLC to publish their Articles of Organization or a notice of its formation. This must be published in two different newspapers for a period of six weeks. These newspapers are determined by the county clerk of the county where the LLC resides. There will be a fee from the newspapers concerning this publication. The information published in the newspaper must be identical to what is on file with the NYDS. The newspaper publisher will provide the LLC owners with an affidavit of publication. This affidavit must be filed with NYDS within 120 days of the publication. A filing fee must be paid.
As an LLC, federal tax law permits this legal entity to be taxed as a partnership or as a corporation when it comes to paying income tax. A general rule in New York is that state law will follow the federal laws. The type of business an LLC conducts will also impact their taxes. Certain LLCs could be required to pay or collect sales taxes. They may also have to pay withholding tax and more. It’s important this be discussed with a tax professional.
The NYDS does not require LLCs to file an annual report.
A Foreign LLC
Should a business located outside the state want to do business in New York, they are required to register with the NYDS. A foreign LLC has to have a registered agent for service with a physical presence in New York. They will also have to provide a certificate of existence or a similar acceptable document from the LLC’s home location.