Forming the LLC
The Limited Liability Company (LLC) is a business structure that affords the limited liability protection of a corporation and the management flexibility of a sole proprietorship or a partnership. In case of a lawsuit or unpaid debt, only the business assets are at risk.
|
 The process of forming a Limited Liability Company and a Corporation are both called "Incorporating". Just like the Corporation the LLC is also registered in the Division of Corporations.
The Corporation and the Limited Liability Company both offer Limited Liability. They both offer the same liability protection to the owner.
|
In contrast with a business set up as a corporation, a LLC does not need to hold regular management meetings.
You are not required to keep records, but it is always a good idea to document important business decisions.
|
To Do List:
-Name Search(Optional)
It is not required but a name search can be conducted by writing a letter (no official format) accompanied by a $5 fee and sent to the NYS Division of Corporations.
A credit card authorization form can be found:
credit card authorization
(http://www.dos.state.ny.us/corp/llccorp.html#cfs)
|
|
The Form: Articles of Organization
The Articles of Organization is not actually a form and it does not have a standard format. You can a obtain a simple version of it from NYS Division of Corporations and use it to incorporate your business.
Articles of Organization
(http://www.dos.state.ny.us/corp/llcfile.html)
|
|
Filing the Form
You should mail or deliver the form accompanied with the fees(you can send check or a credit card authorization form mentioned in the link earlier) to:
NYS Department of State,
Division of Corporations,
State Records and Uniform Commercial Code,
41 State Street, Albany, NY 12231
The Fee for registering the Articles of Organization is $200 plus $10 for each certified copy.
Publishing
To complete the registration process you should publish a notice in an appriced local paper. To obtain a list of approved publications call your local County Clerk’s office. Once you publish you will receive a "Certificate of Publication".
For more information see the publication section.
Call the Division of Corporations helpline to get most current information:
8:00 A.M. to 5:00 P.M. (518) 473-2492
|
|
After Registration
-Getting a Tax ID You are required to apply for a Tax ID(EIN) for your LLC. The Tax ID is like a social security number for your business.
-Business Bank Account Once you register the business and get your Tax ID you can go to a bank and open a business checking account. Having a separate account enables you to separate your business and personal expenses.
-Retail Tax Authorization If required for your business you should obtain Retail sales tax Authorization, also referred to as "Certificate of Authority"
-Obtain any licenses or permits your business may require.
|
Another advantage of a LLC is taxation. Similar to sole proprietorship and partnerships, a LLC has passthrough taxation, so the members declare the business earnings on their personal income taxes. Nevertheless, LLC owners can elect to have their business taxed like a corporation. This will reduce the taxes for the owners who plan to retain most of the earnings in the corporation.
You should speak with your accountant to see which elective taxation is suitable for your business.
|
For a single-owner LLC you just need to submit a schedule C with your tax returns, with a multi-owned LLC, you will need to file a form 1065 (same as with partnerships).
The LLC members need to fill the Schedule K-1 (IRS Document), which breaks down each member shares of the business’s profits and losses. The LLC member’s must report their profit and loss information on their 1040 adding Schedule E.
|
|
Even though filing the LLC documents is a relatively straightforward process you might want to use a lawyer, an accountant or an Incorporating Company to help you.
Here are 4 ways you can form a corporation:
- Using an “incorporating company” will cost $50 to $200 extra, but these companies will register your business and, depending on the package you buy, even get your Tax ID Number.
- Your accountant might know the registration process and can help you for a fee.
- Using a lawyer is the most expensive, but most professional, solution. Depending on the lawyer, she might be able to help you to obtain the proper licenses for your industry.
- Form the LLC yourself using our guide.
|
For more information on forming your LLC proceed to the next section. Running your LLC
Have more questions about LLC?
Ask them on our Forum!
