Reserve the company’s business name (optional), file the company’s articles of organization and adopt the company’s operating agreement
Agency: New York State Department of State, Division of Corporations
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 name reservation can be done online at the following: http://www.dos.ny.gov/corps/llccorp.html . 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 company name must contain the words “Limited Liability Company,” “L.L.C.,” or “LLC.”
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). Section 203(e) of NY LLC Law contains specific requirements as to what is required to be in the articles of incorporation.
Time and cost: Less than 1 day (online procedure), USD 275 (USD 200 filing fee, USD 75 expedited service fee)
Apply for federal identification number (EIN) for tax and employer purposes
Agency: US Internal Revenue Service
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 at http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Employer-ID-Numbers-EINs (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.
Time and cost: Less than 1 day (online procedure), no charge
Register to collect state sales tax
Agency: New York State Department of Taxation and Finance
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). See the Department of Taxation and Finance’s Official Publication 750, “A Guide to Sales Tax in New York State.”.
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 (http://www.tax.ny.gov/). 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.
If the company expects to make taxable sales in the State of New York, it must register with the Tax Department at least 20 days before it begins business. New York State will then send to the company a Certificate of Authority which must be displayed at your place of business at all times.
Time and cost: Less than 1 day (online procedure), no charge
Register as an employer with the Unemployment Insurance Division at the State Labor Department
Agency: New York State Department of Labor
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 (https://applications.labor.ny.gov/eRegWeb/registerEmployer/uiEPMWelcomeMain.faces) or by completing Form NYS-100 and submitting it by mail or fax.
Time and cost: Less than 1 day (online procedure), no charge
Arrange for workers’ compensation and disability insurance
Agency: New York State Workers’ Compensation Board
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 payoff.
Each “covered employer” must post and maintain at the place of business a prescribed form, Notice of Compliance, Form DB-120, stating that the provisions have been named for the payment of disability benefits to all eligible employees. An employer who has employed in New York State one or more employees at least 30 days in any calendar year is a “covered employer” subject to the Disability Benefits Law after the expiration of four weeks following the 30th day of such employment (WCL §202). These 30 days of employment need not be consecutive days.
Time and cost: 1 day, no charge
Arrange for publication and submit certificate and affidavits of publication
Agency: New York State Department of State, Division of Corporations
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. One newspaper must be “printed daily” and the other “printed weekly.
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.
Time and cost: 1 day, USD 450 – 500
