Company Registration in New York - Business Starting & Setup

New York is a common law state.

The Consolidated Laws form the general statutory law.

LLCs and business corporations are regulated by Limited Liability Company Law and Business Corporations Law accordingly.

The principal forms of business organization in New York are:

• Business Corporation;
• Not-for-Profit Corporation;
• Limited Liability Company;
• General Partnership;
• Limited Partnership;
• Sole Proprietorship

One of the most common structures is the limited liability company.

There is a range of requirements to the name of limited liability company in New York:

1. A company name shall contain the words "Limited Liability Company'' or the abbreviation "L.L.C.'' or the designation "LLC'';
2. shall be such as to distinguish it from the existing names;
3. shall not contain the following phrases or any abbreviation or derivative thereof: board of trade, state police, chamber of commerce, state trooper, community renewal, tenant relocation, corporation, urban development, incorporated, urban relocation, partnership;
4. shall not contain the following words, or any abbreviation or derivative thereof: acceptance, guaranty, annuity, indemnity, assurance, insurance, attorney, investment, bank, lawyer, benefit, loan, bond, mortgage, casualty, savings, doctor, surety, endowment, title, fidelity, trust, finance, underwriter unless the approval of the superintendent of banks or the superintendent of insurance, asappropriate, is attached to the articles of organization or unless the word "doctor" or "lawyer" or an abbreviation or derivative thereof is used in a context that clearly denotes a purpose other than the practice of law or medicine;
5. shall not, unless the approval of the state department of social services is attached to the articles of organization or application for authority, contain the word "blind" or "handicapped." Such approval shall be granted by the state department of social services if in its opinion the word "blind" or "handicapped" as used in the limited liability company's proposed name will not tend to mislead or confuse the public into believing that the limited liability company is organized for charitable or nonprofit purposes related to the blind or the handicapped;
6. shall not, unless the approval of the attorney general is attached to the articles of organization or application for authority, contain the word "exchange" or any abbreviation or derivative thereof. Such approval shall not be granted by the attorney general if in his or her opinion the use of the word "exchange" in the limited liability company's proposed name would falsely imply that the limited liability company conducts its business at a place where trade is carried on in securities or commodities by brokers, dealers or merchants;
7. shall not contain the following terms: <i>"school," "education," "elementary," "secondary," "kindergarten," "prekindergarten," "preschool," "nursery school," "museum," "history," "historical," "historical society," "arboretum," "library," "college," "university" or other term restricted by section 224 of the education law; "conservatory," "academy," or "institute" or any abbreviation or derivative of such terms, shall have endorsed thereon or annexed thereto the consent of the commissioner of education.

The following steps are required to incorporate an LLC in New York:

1. Reserve the company's business name (optional), file the company's articles of organization and adopt the company's operating agreement – less than 1 day (online procedure)

The company founders may reserve the name of the company with the New York State Department of State Division of Corporations prior to filing the company's articles of organization. To reserve a name, the founders should file an application for Reservation of Name and pay a fee of USD 20. The application holds the name for 60 days and may be extended twice for additional periods of 60 days. The fee to extend the reservation of name is also USD 20.

The founders must file the company's articles of organization with the New York Department of State Division of Corporations. Forms can be purchased at a legal supply store or downloaded from the department’s website. The application processing time is about seven business days. However, optional expedited processing is available according to the following fee schedule:

• 2-hour turnaround: USD 150 (additional fee)
• Same-day service: USD 75 (additional fee)
• 24-hour turnaround: USD 25 (additional fee)

New York State requires an LLC to have a written operating agreement but such agreement does not have to be filed with the state. The business members may enter into an operating agreement before, at the time of, or within 90 days after the filing of the articles of organization. Regardless of when such an agreement was entered into, it may be effective upon the formation of the LLC or at a later date specified in the operating agreement (provided, however, that under no circumstances shall an operating agreement become effective prior to the formation of such company).

2. Apply for federal identification number (EIN) for tax and employer purposes – less than 1 day (online procedure)

The company needs to apply for a federal Employer Identification Number ("EIN"), which is used for tax and employer purposes. Founders must file IRS Form SS-4 (available from the US Internal Revenue Service).

It is possible to apply online (processing time: immediate), by telephone (processing time: immediate), by fax (processing time: 4 business days), or by mail (processing time: 4 weeks). If applicants apply online, they do not need fill out IRS Form SS-4.

3. Register to collect state sales tax – less than 1 day (online procedure)

Businesses that "sell taxable tangible personal property, perform taxable services, receive amusement charges, or operate a hotel or motel, and restaurants, taverns, or other establishments that sell food and drink" must register as a sales tax vendor and obtain a Certificate of Authority, as well as those businesses that buy and sell for resale (for example, a wholesale distributor).

To register, the founders must file Form DTF-17 or register online at the website of the New York State Department of Taxation and Finance. After the company has registered, it generally must file quarterly sales and use tax returns regardless of whether it has started or done any business.

4. Register as an employer with the Unemployment Insurance Division at the State Labor Department – less than 1 day (online procedure)

Founders must register as an employer by completing Form NYS-100 to determine whether or not the company is liable under the New York State Unemployment Insurance Law. If the company is determined liable, the Department of Labor will send the company quarterly combined withholding, wage reporting and unemployment insurance returns for reporting wages paid to the company's employees. General business employers may register online at the New York State Department of Labor website or by completing Form NYS-100 and submitting it by mail or fax.

5. Arrange for workers' compensation and disability insurance – less than 1 day (online procedure)

As New York employers, the LLC founders must obtain and maintain workers’ compensation insurance and disability insurance for its employees by purchasing a workers’ compensation insurance policy and a disability benefits insurance policy from an authorized private insurance carrier or through the NYS Insurance Fund (or by self-insurance for workers' compensation).

The company’s federal Employer Identification Number (""EIN"") is the company’s primary identification with respect to communications with the Workers’ Compensation Board or by becoming a member of a group self-insurer authorized by the board. The company must give its EIN to its insurance carrier when obtaining or maintaining its workers’ compensation or disability coverage. Workers’ compensation insurance floor is calculated using each employee’s risk classification, salary, and total payroll.

6. Arrange for publication and submit certificate and affidavits of publication – 1 day

Section 206 of the New York State Limited Liability Company Law requires that within 120 days (after the effectiveness of the initial articles of organization), a limited liability company (LLC) must publish in two newspapers a copy of the Articles of Organization or a notice related to the formation of the LLC once a week for six successive weeks. The newspapers must be designated by the county clerk of the county in which the office of the LLC is located, as stated in the Articles of Organization.

The State of New York website has a directory of all New York county websites (http://www.nysegov.com/citguide.cfm?context=citguide&content=munibycounty1), which entrepreneurs can use as a reference to find their relevant county for publishing. The cost of notice of publication varies by county.

After publication, the printer or publisher of each newspaper will provide the entrepreneur with a Certificate of Publication, with the affidavits of publication of the newspapers attached. It must be submitted to the New York Department of State, Division of Corporations, One Commerce Plaza, 99 Washington Avenue, Albany, NY 12231. The fee for filing the Certificate of Publication is USD 50.

The records of the Division of Corporations may be searched on its site. You may search the records of the Division of Corporations to obtain information on corporations, limited liability companies, limited partnerships, and limited liability partnerships. Information available includes the following:

1. current entity name;
2. date of organization;
3. jurisdiction, if other than New York State;
4. county location;
5. service of process address;
6. registered agent, if any; and
7. the current status of the entity.

Information on business corporations may also include the name and address of the chief executive officer and the principal business location. The information available through the site is updated daily.

The Department of State does not require or maintain information regarding the names and addresses of officers or directors of corporations, the members or managers of a limited liability company, the limited partners of a limited partnership or the partners in a limited liability partnership. These records are internal records maintained by the corporation, limited liability company, limited partnership or limited liability partnership.

Each domestic limited liability company shall maintain a registered office in the US.

Each domestic limited liability company shall maintain the following records, which may, but need not, be maintained in this state:

1. if the limited liability company is managed by a manager or managers, a current list of the full name set forth in alphabetical order and last known mailing address of each such manager;
2. a current list of the full name set forth in alphabetical order and last known mailing address of each member together with the contribution and the share of profits and losses of each member or information from which such share can be readily derived;
3. a copy of the articles of organization and all amendments thereto or restatements thereof, together with executed copies of any powers of attorney pursuant to which any certificate or amendment has been executed;
4. a copy of the operating agreement, any amendments thereto and any amended and restated operating agreement; and
5. a copy of the limited liability company's federal, state and local income tax or information returns and reports, if any, for the three most recent fiscal years.

A limited liability company may maintain its records in other than a written form if such form is capable of conversion into written form within a reasonable time.

The secretary of state shall be the agent of every domestic limited liability company that has filed with the department of state articles of organization making such designation.

Any designated post office address to which the secretary of state shall mail a copy of process served upon him or her as agent of a domestic limited liability company shall continue until the filing of a certificate directing the mailing to a different post office address.

In addition to the designation of the secretary of state, each domestic limited liability company may designate a registered agent upon whom process against the limited liability company may be served. The agent must be either:

• a natural person who is a resident of this state or has a business address in this state;
• a domestic limited liability company or an authorized foreign limited liability company; or
• a domestic corporation or a foreign corporation authorized to do business in this state.

The registered agent of a limited liability company may resign as such agent. The registered agent shall file a certificate with the department of state entitled "Certificate of resignation of registered agent of... (name of limited liability company) under subdivision (d) of section three hundred two of the Limited Liability Company Law" and executed by such registered agent.

The designation of a registered agent shall terminate thirty days after the filing with the department of state of the certificate of resignation. A certificate designating a new registered agent may be delivered to the department of state by the limited liability company within the thirty days or thereafter.

New York State law does not require a corporation to have a seal.

The redomiciliation of companies to or from New York is <b>not permitted</b>.

There is no statutory requirement for a manager an LLC. LLC can be managed by the members.

Management of LLC can be governed by its member(s) or by elected manager(s). If a limited liability company operating agreement states that management of the limited liability company is vested in a manager or managers, a minimum one manager is required.

Managers do not need to be members of the limited liability company. Residents of any country may become managers of New York LLC.

There is no statutory requirement for a secretary in New York.

An LLC must have a minimum of one member at any time. Members may be either a natural person or a corporate entity. There are no residency requirements.

Except as provided in the operating agreement, a limited liability company shall hold meetings of members annually. Meetings of members may be held at a place, either within or outside this state, as may be fixed by or in accordance with the operating agreement, or if not so fixed, at the office of the limited liability company. Except as provided in the operating agreement, members of a limited liability company may participate in a meeting by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other. Such participation shall constitute presence in person at the meeting.

Beneficiaries’ details do not appear on a public profile. Generally, service providers including firms specializing in company formation, trust managers, lawyers, and accountants, keep beneficiaries’ information in strict confidentiality.

There is no minimum capital required to form a New York LLC.

Capital contributions to the LLC may be made either in cash, goods, services or know-how.